The average cost of tuition, room and board at community colleges is reported to be $8,500 per year, but a financial administrator believes that the average cost is higher. A study conducted using 150 community colleges showed that the average cost per year is $9,000 with a standard deviation of
$1,200. Let α = 0.05.
What are the null and alternative hypotheses for this study?

Question

The average cost of tuition, room and board at community colleges is reported to be $8,500 per year, but a financial administrator believes that the average cost is higher. A study conducted using 150 community colleges showed that the average cost per year is $9,000 with a standard deviation of $1,200. Let α = 0.05. What are the null and alternative hypotheses for this study? A) Null: μ ≤ $9,000; alternative: μ > $9,000 B) Null: μ ≤ $9,000; alternative: μ < $9,000 C) Null: μ ≤ $8,500; alternative: μ > $8,500 D) Null: μ ≤ $8,500; alternative: μ < $8,500 E) None of these statements are true

Quizplus · Accepted Answer

The null hypothesis is that the average cost is $8,500 or less, while the alternative hypothesis is that it is greater than $8,500, as the administrator believes the cost is higher.

The Average Cost of Tuition, Room and Board at Community