First, we establish
our hypothesis:
<span>Null hypothesis H0: μ = $1.00 </span>
Alternative hypothesis
Ha: μ ≠ $1.00
<span>Let’s say X = the sample average cost of a daily newspaper
= 0.96</span>
u = population mean
cost = 1.00
S = sample standard
deviation = 0.18
Calculating for z
value:
z = (X – u) / S
z = (0.96 – 1) / 0.18
z = – 0.222
From the standard
distribution table at this z value, p-value = 0.4129
Since alpha = 0.01,
the decision therefore is:
<span>Do not reject the null
hypothesis because the p-value is greater than 0.01. There is enough evidence
to support the claim that the mean cost of newspapers is $1. </span>
1/2 + 1/4 = 3/4
3/4 + 1/4 = 1
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