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Hypothesis Testing: Z-Test & T-Test

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Hypothesis Testing

Z-TEST & T-TEST


Review
State the null and alternative hypothesis.
1. The average room rate in hotels in a certain region is $82.53. A travel agent
believes that the average in a particular resort area is different.
◦ H0 : μ = 82.53, Ha : μ ≠ 82.53
2. The average farm size in a predominately rural state was 69.4 acres. The
secretary of agriculture of that state asserts that it is less today.
◦ H0 : μ = 69.4, Ha : μ < 69.4
Z-Test
1.  State the Hypotheses
2. Determine the Level of Significance
3. Determine the critical value and the rejection region
4. State the decision rule
5. Compute the test statistic (Z)
◦ Z=
6. Formulate the decision
Example
A diet clinic states that there is an average loss of 24 pounds for those who stay
on the program for 20 weeks. The standard deviation is 5 pounds. The clinic tries
a new diet, reducing salt intake to see whether that strategy will produce a
greater weight loss. A group of 40 volunteers loses an average of 16.3 pounds
each over 20 weeks. Should the clinic change the new diet? Use α = 0.05.
1. State the Hypothesis
◦ H0 : μ = 24, Ha : μ > 24

2. Determine the Level of Significance


◦ α = 0.05 (right-tailed)
Example
3.  Determine the critical value and the rejection region.
◦ Critical Value = 1.65

4. State the Decision Rule


◦ Reject H0 if Z > 1.65

5. Compute the test statistic (Z)


◦ Z=
◦ Z= 1.65

◦ Z=

6. Formulate conclusion: Do not Reject H0


Practice
Practice
a.  Critical Value = 1.96
a. Z = 2.59
b. Reject H0

b. Critical Value = -1.65


a. Z = 2.59
b. Do not reject H0
T-Test
1.  State the Hypotheses
2. Determine the Level of Significance
3. Determine the critical value and the rejection region
4. State the decision rule
5. Compute the test statistic (T)
◦ Z=
6. Formulate the decision
Determining the Critical Value (T-Test)
 Parts of the T-Table
◦ Degrees of Freedom (d.f.) = Sample Size – 1
◦ Significance Level ()

To determine the Critical Value


1. Locate the degree of freedom (First column on the right)
2. Identify the level of significance (Two tailed/One tailed)
3. Find the intersection
Practice
Practice
 a. Critical Value = 2.797 (two-tailed)
◦ T=
◦ Do not reject the null hypothesis

b. Critical Value = 2.492 (right-tailed)


◦ T=
◦ Do not reject the null hypothesis

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