Question

Insurance adjusters are concerned about the high estimates they are receiving from Jocko’s Garage. To see if the estimates are unreasonably high, each of 10 damaged cars was taken to Jocko’s and to a trusted garage and the estimates recorded. Here are the results:
Jocko's: 500,1550,1250,1300,750,1000,1210,1300,800,2500


Other: 430,1500,1300,1280,780,870,1120,1140,650,2290


Use the test of hypothesis procedure to investigate the allegation that Jocko’s Garage over-charges for the car repairs. State the null and alternative hypotheses (H0 and Ha) in a sentence and also using proper Greek symbol(s) for the parameter(s). Show the test statistic calculations with degrees of freedom, and the P-value etc. Use significance level value of 5%. State your conclusion in simple language.

Answer 1

Answer:

The null hypotesis is not rejected, so, there is not evidence that jocko's garage over - charges for the car repairs.

Step-by-step explanation:

H0 μ=0

Ha μ>0

Jocko Other Difference

500 430 70

1550 1500 50

1250 1300 -50

1300 1280 20

750 780 -30

1000 870 130

1210 1120 90

1300 1140 160

800 650 150

2500 2290 210

d bar =80

sd = 84.59

t=(d bar - μ)/sd = 0.9457

p-value=P($t_{9}$ > 0.9457)= 0.1845 > 5%

The null hypotesis is not rejected, so, there is not evidence that jocko's garage over - charges for the car repairs.