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A travel agent claims that the standard deviation of the room rates of three-star hotels in Chicago is at least $35. A random sample of 21 three-star hotels has a standard deviation of $22. At α = 0.01, is there enough evidence to reject the agent’s claim?
(a) Identify the claim and state H0 and Ha,
(b) Find the critical value(s) and identify the rejection region(s),
(c) Find the standardized test statistic X2,
(d) Decide whether to reject or fail to reject the null hypothesis,
(e) Interpret the decision in the context of the original claim. Assume the population is normally distributed. |
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