The Eagle Ridge Contractors' Association claims the average price of a home in their subdivision is
$125,150, with a standard deviation of $7,350. A sample of 36 homes for sale in this subdivision had an
average selling price of $123,550. Is there evidence that the costs of homes for sale in this subdivision are
actually lower than claimed?
-At a certain university, the average cost of books per student was $390 per student last semester. In a sample of 60 students this semester, their average cost was $425 with a standard deviation of $75.
The Dean of Students believes that the costs are greater this semester. What is the test statistic for this
Hypothesis?
A) 0.47
B) 0.58
C) 3.61
D) 28.00

Question

Quizplus · Accepted Answer

The test statistic is calculated using the formula for the z-test: $ z = \frac{\bar{x} - \mu}{\frac{\sigma}{\sqrt{n}}} $. For the book costs, $\bar{x} = 425$, $\mu = 390$, $\sigma = 75$, and $n = 60$. Plugging these values into the formula gives $ z = \frac{425 - 390}{\frac{75}{\sqrt{60}}} \approx 3.61 $.

The Eagle Ridge Contractors' Association Claims the Average Price of a Home