Question

A statewide real estate sales agency, Farm Associates, specializes in selling farm property in the state of Nebraska. Its records indicate that the mean selling time of farm property is 90 days. Because of recent drought conditions, the agency believes that the mean selling time is now greater than 90 days. A statewide survey of 100 recently sold farms revealed a mean selling time of 94 days, with a standard deviation of 22 days.
At the 0.10 significance level, has there been an increase in selling time?
a. What is the decision rule? (Round your answer to 3 decimal places.)
b. Compute the value of the test statistic. (Round your answer to 2 decimal places.)
c. What is your decision regarding H0?

Answer 1

Answer:

Test statistic = 1.818

Reject H0

Step-by-step explanation:

H0 : μ = 90

H1 : μ > 90

xbar = 94 ; s = 22 ; n = 100

The test statistic : (xbar - μ) ÷ (s/√(n))

Test statistic = (94 - 90) ÷ (22/√100)

Test statistic = 4 ÷ 2.2

T = 1.818

The critical value :

At α = 0.10

Degree of freedom = n - 1 = 100 - 1 = 99

Tcritical(0.10, 99) = 1.290

Decison region :

Reject H0 if Test statistic > |Tcritical |

1.818 > 1.290

We reject H0