Question

According to a recent report, customers who shop at a certain online store spend, on average, s1,500 a year at the store. To investigate whether the mean amount spent was greater than the reported averag obtained the mean and standard deviation of the amount spent in the past year by a random sample of 120 customers who shop at the store. With all conditions for inference met, the economist conducted the appropriate hypothesis test and obtained a p-value of 0.25. Which of the following statements is the most appropriate conclusion for the investigation?
(A) There is convincing statistical evidence that the mean amount of money spent each year by all customers who shop at the store is $1,500. who shop at the store is greater than $1,500. who shop at the store is less than $1,500. who shop at the store is greater than $1,500.
(B) There is convincing statistical evidence that the mean amount of money spent each year by all customers
(C) There is convincing statistical evidence that the mean amount of money spent each year by all customers
(D) There is not convincing statistical evidence that the mean amount of money spent each year by all customers
(E) The ere is not convincing statistical evidence that the mean amount of money spent each year by any sample of 120 customers who shop at the store is greater than $1,500.

Answer 1

Answer:

There is convincing statistical evidence that the mean amount of money spent each year by all customers who shop at the store is $1,500.

Step-by-step explanation:

We must recall that the investigator wishes to investigate whether the mean amount spent was greater than the reported average obtained the mean. From this, we have the following hypothesis:

Null hypothesis ($H_{0}$):               $\mu_{0}$ = $1500

Alternative hypothesis ($H_{1}$):    $\mu_{0}$ > $1500

We assume the level of significance ($\alpha$) = 5%.

We are told that all conditions for inference are met, and the economist conducted the appropriate hypothesis test and obtained a p-value of 0.25.

Based on statistical test conclusion, if p-value is higher that the level of significance ($\alpha$), we conclude that the test is insignificant, otherwise, it is significant.

The p-value is given as 0.25 and this value is higher than level of significance ($\alpha$) = 0.05. Hence, the test is insignificant. This simply means that, nothing new is discover. Thus, the claim or recent report that customers who shop at a certain online store spend, on average, $1,500 a year at the store is TRUE.

We therefore conclude that, there is convincing statistical evidence that the mean amount of money spent each year by all customers who shop at the store is $1,500.