A recent survey of gasoline prices indicated that the national average was $4.098 per gallon. The Dallas Automobile Club claimed that gasoline in Texas was significantly lower than the national average. A survey covering 10 different suburbs in Dallas found the average price of gasoline to be $3.924 per gallon with a population standard deviation of $0.053. What critical value should be used to test the claim using α = 0.01?
A) 1.26
B) 2.33
C) -1.26
D) -2.33

Question

Quizplus · Accepted Answer

Since we are trying to test if the gasoline price in Texas is significantly lower than the national average, we need a one-tailed test. With a significance level of α = 0.01 and degrees of freedom (n-1) = 9, the critical t-value is -2.33. Therefore, the correct answer is D.

A Recent Survey of Gasoline Prices Indicated That the National