Last year, the weekly price of a 4-litre container of milk
Subject: Mathematics / Statistics
Question
1. Last year, the weekly price of a 4-litre container of milk averaged $3.89 with a standard deviation of $0.40. A consumer advocacy group wishes to test if the price of a 4-litre container of milk is higher compared to last year. It is assumed that the standard deviation in the weekly price of milk has stayed the same in 2010.
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(a) State the most appropriate null and alternative hypothesis.
(b) To test the null hypothesis stated in (a), the consumer advocacy group randomly selected n = 35 weeks out of the year, observing the price of milk on every Monday of each chosen week. The average price of milk was found to be X = $4.10. Using this information, find the value of the test statistic produced by the sample.
(c) Testing at ? = 0.05, does the result in (b) support the null hypothesis in (a)? Ensure your answer is statistically justified.
(d) Find the P -value of the result in (b).
(e) In the context of the problem, interpret the meaning of the P -value found in (d).
(Note: An interpretation is NOT a decision rule!)
