BUS 215 Lecture Notes - Lecture 2: Standard Deviation, Decision Rule, Test Statistic

• School: Stony Brook University
• Department: Business Management
• Course: BUS 215
• Professor: Aaron Young- Shin Kim

Document Summary

The problem indicates a right-tail test, so the hypotheses would be: h0: 30,000 miles (dealer"s mean is not greater than the national average, h1: > 30,000 miles (dealer"s mean is greater the national average) The critical value is the boundary between two regions in the decision rule. Excel function =t. inv( , d. f) i am only able to find the left-tail critical value. By simply taking the absolute value i would have the right-tail critical value. The population standard deviation is unknown so the degrees of freedom, d. f, is n-1 therefore d. f = 21-2. The level of significance is stated as 5 percent, = . 05. Excel function =t. inv(. 05,20) got the left-tail critical value of -1. 7247. Taking absolute value of it results in the right-tail critical value of 1. 7247. We will reject h0 if test statistic, tcalc > 1. 7247. I have included a physical representation below for the one-tailed test using t for d. f.