question archive According to the American Pet Products Manufacturers Association, cat owners spend an average of $179 annually in routine veterenary visits
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According to the American Pet Products Manufacturers Association, cat owners spend an average of $179 annually in routine veterenary visits. A random sample of local cat owners revealed that 10 randomly selected owners spent an average of $205 with sample standard deviation of $26. Is there a significant statistical difference at ?=0.01?
Answer:
The test hypothesis is
Ho:μ=179
Ha:μ not equal to 179
The test statistic is
t=(xbar-μ)/(s/vn)
=(205-179)/(26/sqrt(10))
=3.16
Given a=0.01, the critical value is |t(0.005,df=n-1=9)|=3.25 (check student t table)
Since 3.16 is less than 3.25, we do not reject Ho.
So we can not conclude that there is a significant statistical difference at α=0.01