Lecture 3

HYPOTHESIS TESTS ABOUT μ: σ KNOWN

Steps to Perform a Test of Hypothesis
with the Critical-Value Approach

1. State the null and alternative hypotheses.

2. Select the distribution to use.
3. Calculate the value of the test statistic.
4. Determine the rejection and nonrejection
regions.
5. Make a decision.

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Example 9-3
The TIV Telephone Company provides long-distance
telephone service in an area. According to the company’s
records, the average length of all long-distance calls placed
through this company in 2009 was 12.44 minutes. The
company’s management wanted to check if the mean length
of the current long-distance calls is different from 12.44
minutes. A sample of 150 such calls placed through this
company produced a mean length of 13.71 minutes. Assume
that the population standard deviation is of 2.65 minutes.
Using the 2% significance level, can you conclude that the
mean length of all current long-distance calls is different
from 12.44 minutes?

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Example 9-3: Solution

p Step 1: H0 : μ = 12.44 H1 : μ ≠ 12.44

p Step 2: The population standard deviation
σ is known, and the sample size is large (n
> 30). Due to the Central Limit Theorem,
we will use the normal distribution to
perform the test.

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Example 9-3: Solution

p Step 3: α = .02
p The ≠ sign in the alternative hypothesis
indicates that the test is two-tailed
p Area in each tail = α / 2= .02 / 2 = .01
p The z values for the two critical points are
-2.33 and 2.33

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Figure 9.9

Prem Mann, Introductory Statistics, 7/E

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Calculating the Value of the Test Statistic

When using the normal distribution, the

value of the test statistic z for x for a
test of hypothesis about μ is computed as
follows:
x -µ s
z= where s x =
sx n

The value of z for x is also called the

observed value of z.
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Example 9-3: Solution
p Step 4:
s 2.65
sx = = = .21637159
n 150
x - µ 13.71 - 12.44
z= = = 5.87
sx .21637159

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Example 9-3: Solution
§ Step 5: This value of z = 5.87 is greater
than the critical value of z = 2.33, and it
falls in the rejection region in the right
tail in Figure 9.9. Hence, we reject H0
and conclude that based on the sample
information, it appears that the mean
length of all such calls is not equal to
12.44 minutes.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-4
The mayor of a large city claims that the average
net worth of families living in this city is at least
$300,000. A random sample of 25 families
selected from this city produced a mean net
worth of $288,000. Assume that the net worths
of all families in this city have a normal
distribution with the population standard
deviation of $80,000. Using the 2.5%
significance level, can you conclude that the
mayor’s claim is false?

Prem Mann, Introductory Statistics, 7/E

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Example 9-4: Solution

p Step 1: H0 : μ ≥ $300,000
H1 : μ < $300,000
p Step 2: The population standard deviation
σ is known, the sample size is small (n <
30), but the population distribution is
normal. Consequently, we will use the
normal distribution to perform the test.

Prem Mann, Introductory Statistics, 7/E

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Example 9-4: Solution

p Step 3: α = .025
p The < sign in the alternative hypothesis
indicates that the test is left-tailed
p Area in the left tail = α = .025
p The critical value of z is -1.96

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Figure 9.10

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Example 9-4: Solution
p Step 4:

s 80,000
sx = = = $16,000
n 25
x - µ 288,000 - 300,000
z= = = -.75
sx 16,000

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Example 9-4: Solution
§ Step 5: This value of z = -.75 is greater
than the critical value of z = -1.96, and it
falls in the nonrejection region. As a
result, we fail to reject H0. Therefore, we
can state that based on the sample
information, it appears that the mean net
worth of families in this city is not less
than $300,000.

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HYPOTHESIS TESTS ABOUT : NOT
KNOWN

Three Possible Cases

Case I. If the following three conditions are

fulfilled:

1. The population standard deviation σ is not

known
2. The sample size is small (i.e., n < 30)
3. The population from which the sample is
selected is normally distributed.

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HYPOTHESIS TESTS ABOUT μ: σ NOT
KNOWN

Three Possible Cases

Case II. If the following two conditions are

fulfilled:

1. The population standard deviation σ is not

known
2. The sample size is large (i.e., n ≥ 30)

Prem Mann, Introductory Statistics, 7/E

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HYPOTHESIS TESTS ABOUT μ: σ NOT
KNOWN

Three Possible Cases

Case III. If the following three conditions are

fulfilled:

1. The population standard deviation σ is not

known
2. The sample size is small (i.e., n < 30)
3. The population from which the sample is
selected is not normally distributed (or its
distribution is unknown).

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HYPOTHESIS TESTS ABOUT μ: σ NOT
KNOWN
Three Possible Cases

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HYPOTHESIS TESTS ABOUT μ: σ NOT
KNOWN

Test Statistic
The value of the test statistic t for the
sample mean x is computed as
x -µ s
t= where s x =
sx n

The value of t calculated for x by using this

formula is also called the observed value
of t.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-5
A psychologist claims that the mean age at which
children start walking is 12.5 months. Carol
wanted to check if this claim is true. She took a
random sample of 18 children and found that the
mean age at which these children started walking
was 12.9 months with a standard deviation of .80
month. It is known that the ages at which all
children start walking are approximately normally
distributed. Find the p-value for the test that the
mean age at which all children start walking is
different from 12.5 months. What will your
conclusion be if the significance level is 1%?

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-5: Solution

p Step 1: H0 : μ = 12.5
H1 : μ ≠ 12.5
p Step 2: The population standard deviation
σ is not known, the sample size is small (n
< 30), and the population is normally
distributed. Consequently, we will use the
t distribution to find the p-value for the
test.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-5: Solution
p Step 3: The ≠ sign in the alternative
hypothesis indicates that the test is two-
tailed
s .80
sx = = = .18856181
n 18
x - µ 12.9 - 12.5
t= = = 2.121
sx .18856181

and df = n – 1 = 18 – 1 = 17
.02 < p-value < .05

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Figure 9.11 The required p-value

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Example 9-5: Solution
§ Step 4: For any α greater than .05, we
will reject the null hypothesis. For any α
less than .02, we will not reject the null
hypothesis. For our example, α = .01,
which is less than the lower limit of the p-
value ranges of .02. As a result, we fail
to reject H0 and conclude that the mean
age at which all children start walking is
not different from 12.5 months.

Prem Mann, Introductory Statistics, 7/E

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Example 9-6
Grand Auto Corporation produces auto batteries.
The company claims that its top-of-the-line Never
Die batteries are good, on average, for at least 65
months. A consumer protection agency tested 45
such batteries to check this claim. It found the
mean life of these 45 batteries to be 63.4 months
with a standard deviation of 3 months. Find the
p-value for the test that mean life of all such
batteries is less than 65 months. What will your
conclusion be if the significance level is 2.5%?

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-6: Solution

p Step 1: H0 : μ ≥ 65
H1 : μ < 65
p Step 2: The population standard deviation
σ is not known and the sample size is large
(n > 30). Consequently, we will use the t
distribution to find the p-value for the test.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-6: Solution
p Step 3: The < sign in the alternative
hypothesis indicates that the test is left-
tailed
s 3
sx = = = .44721360
n 45
x -µ 63.4 - 65
t= = = -3.578
sx .44721360

and df = n – 1 = 45 – 1 = 44
p-value < .001

Prem Mann, Introductory Statistics, 7/E

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Figure 9.12 The required p-value

Prem Mann, Introductory Statistics, 7/E

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Example 9-7
Refer to Example 9-5. A psychologist claims that
the mean age at which children start walking is
12.5 months. Carol wanted to check if this claim
is true. She took a random sample of 18 children
and found that the mean age at which these
children started walking was 12.9 months with a
standard deviation of .80 month. Using the 1%
significance level, can you conclude that the mean
age at which all children start walking is different
from 12.5 months? Assume that the ages at
which all children start walking have an
approximately normal distribution.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-7: Solution

p Step 1: H0 : μ = 12.5
H1 : μ ≠ 12.5
p Step 2: The population standard deviation
σ is not known, the sample size is small (n
< 30), and the population is normally
distributed. Consequently, we will use the
t distribution to perform the test.

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-7: Solution
p Step 3: Significance level = .01. The ≠ sign
in the alternative hypothesis indicates
that the test is two-tailed and the
rejection region lies in both tails.
p Area in each tail = α/2 = .01/2 = .005
p df = n – 1 = 18 – 1 = 17
p The critical values for t for 17 df and
.005 area in each tail are -2.898 and
2.898.

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Figure 9.13 The required p-value

Prem Mann, Introductory Statistics, 7/E

Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-7: Solution
p Step 4: s = s = .80 = .18856181
x
n 18
x - µ 12.9 - 12.5
t= = = 2.121
sx .18856181
The value of the test statistic t = 2.121 falls
between the two critical points, -2.898 and
2.898, which is the nonrejection region.
Consequently, we fail to reject H0. As a result,
we can state the difference between the
hypothesized population mean and the sample
mean is so small that it may have occurred
because of sampling error.
Prem Mann, Introductory Statistics, 7/E
Copyright © 2010 John Wiley & Sons. All right reserved
Example 9-8
The management at Massachusetts Savings Bank
is always concerned about the quality of service
provided to its customers. With the old computer
system, a teller at this bank could serve, on
average, 22 customers per hour. The
management noticed that with this service rate,
the waiting time for customers was too long.
Recently the management of the bank installed a
new computer system in the bank, expecting that
it would increase the service rate and
consequently make the customers happier by
reducing the waiting time.

Prem Mann, Introductory Statistics, 7/E

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Example 9-8
To check if the new computer system is more
efficient than the old system, the management of
the bank took a random sample of 70 hours and
found that during these hours the mean number
of customers served by tellers was 27 per hour
with a standard deviation of 2.5. Testing at the
1% significance level, would you conclude that
the new computer system is more efficient than
the old computer system?

Prem Mann, Introductory Statistics, 7/E

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Example 9-8: Solution

p Step 1: H0 : μ = 22
H1 : μ > 22
p Step 2: The population standard deviation
σ is not known and the sample size is large
(n > 30). Consequently, we will use the t
distribution to perform the test.

Prem Mann, Introductory Statistics, 7/E

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Example 9-8: Solution
p Step 3: Significance level = .01. The > sign
in the alternative hypothesis indicates
that the test is right-tailed and the
rejection region lies in the right tail.
p Area in the right tail = α = .01
p df = n – 1 = 70 – 1 = 69
p The critical value for t for 69 df and .01
area in the right tail is 2.382.

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Figure 9.14

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Example 9-8: Solution
p Step 4: s = s = 2.5 = .29880715
x
n 70
x -µ 27 - 22
t= = = 16.733
sx .29880715
The value of the test statistic t = 16.733 is
greater than the critical value of t = 2.382, and
it falls in the rejection region. Consequently,
we reject H0. As a result, we conclude that the
value of the sample mean is too large
compared to the hypothesized value of the
population mean, and the difference between
the two may not be attributed to chance alone.
Prem Mann, Introductory Statistics, 7/E
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