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STAT533
COURSE PROJECT PART B
HUYEN BUI
| | Project Part B: Hypothesis Testing and Confidence Intervals | |
Your manager has speculated the following: a. the average (mean) annual income was less than $50,000, b. the true population proportion of customers who live in an urban area exceeds 40%, c. the average (mean) number of years lived in the current home is less than 13 years, d. the average (mean) credit balance for suburban customers is more than $4300. 1. Using the sample data, perform the hypothesis test for each of the above situations in order to see if there is evidence to support your manager’s belief in each case a.-d. In each case use the Seven Elements of a Test of Hypothesis, in Section 6.2 of your text book with α = .05, and explain your conclusion in simple terms. Also be sure to compute the p-value and interpret. 2. Follow this up with computing 95% confidence intervals for each of the variables described in a.-d., and again interpreting these intervals. 3. Write a report to your manager about the results, distilling down the results in a way that would be understandable to someone who does not know statistics. Clear explanations and interpretations are critical. 4. All DeVry University policies are in effect, including the plagiarism policy. 5. Project Part B report is due by the end of Week 6. 6. Project Part B is worth 100 total points. See grading rubric below.
a. The average (mean) annual income was less than $50,000
State the Null and Alternate Hypothesis:
Null Hypothesis: The average (mean) annual income was greater than or equal to $50,000
H0: μ≥50000
Alternate Hypothesis: The average (mean) annual income was less than $50,000.
Ha: μ<50000
We shall use Significance Level, α=0.05.
Since the sample size, n> 30 we shall use z-test for mean to test the given hypothesis.

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