Statement of a problem № m40666


An insurance agent says that the mean cost of insuring a two-year-old sedan (in good condition) is less than $1200. A random sample of 7 similar insurance quotes has a mean cost of $1125 and a standard deviation of $55. Is there enough evidence to support the agent’s claim at α = 0.10? Assume the population is normally distributed. a. Identify the claim and state H0 and Ha. b. Identify the level of significance α and the degrees of freedom. c. Find the critical value t0 and identify the rejection region. d. Find the standardized test statistic t. Sketch a graph. e. Decide whether to reject the null hypothesis. f. Interpret the decision in the context of the original claim.

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