EXERCİSES ABOUT CHAPTER 10.

1. An example of a hypothesis is: a person is innocent until proven guilty. 

TRUE

H0 = Not Guilty
H1 = Guilty
Burden of the Proof Falls on H1 (It is up to H1 to prove that Guiltiness)

4. The researcher must decide on the level of significance before formulating a decision rule and
collecting sample data. 
TRUE
 
Yes. The level of significance is the only item here which depends on the decision of the
researcher.

5. For a one-tailed test using the 0.05 level of significance, the critical value for the z test is
1.645, but for t it is 1.96. 
FALSE

Because for t, it also depends on the degrees of freedom, That is n.

7. Type II error is the probability or risk of rejecting a null hypothesis when it is actually true. 
FALSE
 
No, on the contrary it is the probability or risk of NOT rejecting a null hypothesis when it
is actually false. 

11. If the null hypothesis is   and the alternate hypothesis states that µ is less than 200,
then, a two-tail test is being conducted. 
FALSE.

NO. Because if the null is set as above , the alternative automatically becomes µ < 200
which indicates a 1-tail test on the LEFT.

24. Using a 5% level of significance and a sample size of 25, what is the critical value for a one-
tailed hypothesis test? 
A. 1.708
B. 1.711
C. 2.060
D. 2.064

N= 25 , therefore N -1 = 24 . Using the t table at 5% for degrees of freedom = N-1=24, we

find the value 1.711.
28. If the alternate hypothesis states that µ does not equal 4,000, what is the rejection region for
the hypothesis test? 
A. Both tails
B. Lower or left tail
C. Upper or right tail
D. Center

µ does not equal 4,000, means it can be smaller µ < 4000 or it can be greater µ > 4000 so
we can use TWO TAIL TEST.

36. For a hypothesis test with an alternative hypothesis: µ > 6,700, where is the rejection region
for the hypothesis test located? 
A. Both tails
B. Left or lower tail
C. Right or upper tail
D. Center

The rule of the game is = Look at the direction of “ > “ , it is pointing to the RIGHT so we
should use a right (upper tail) test.

47. The average cost of tuition, room and board at small private liberal arts colleges is reported
to be $8,500 per term, but a financial administrator believes that the average cost is higher. A
study conducted using 350 small liberal arts colleges showed that the average cost per term is
$8,745 with a standard deviation of $1,200. Let = 0.05. What are the null and alternative
hypotheses for this study? 

A. Null: µ  $9,000; alternative: µ > $9,000

B. Null: µ  $9,000; alternative: µ < $9,000
C. Null: µ  $8,500; alternative: µ > $8,500
D. Null: µ  $8,500; alternative: µ < $8,500

Higher implies “ > “ greater than 2500. It is up to financial administrator to prove this
(burden of proof on the alternate test). So H1 is > 8500 which makes H0 automatically 
8500.

48. The average cost of tuition, room and board at small private liberal arts colleges is reported
to be $8,500 per term, but a financial administrator believes that the average cost is higher. A
study conducted using 350 small liberal arts colleges showed that the average cost per term is
$8,745 with a standard deviation of $1,200. Let = 0.05. What is the critical z-value for this test? 
A. +1.96
B. -1.96
C. + 1.65
D. -1.65

Don’t be fooled by some information here like N = 350 and Xbar= 8745 and s= 1200. We
will not need these to answer this question here. Just look at the table at the end of the book
(Appendix B.1 ) you will see that 0.50 – 0.05 = 0.45 . You can find this value to be +1.65.
 49. The average cost of tuition, room and board at small private liberal arts colleges is reported
to be $8,500 per term, but a financial administrator believes that the average cost is higher. A
study conducted using 350 small liberal arts colleges showed that the average cost per term is
$8,745 with a standard deviation of $1,200. Let = 0.05. What is the test statistic for this test? 
A. 3.82
B. 0.204
C. -3.82
D. +3.82

Now we can use the sample information. Using the formula t= (Xbar - µ ) / s / √ N

We obtain (8745 – 8500) / 1200/ √ 350 = 3.819 ≈ 3.82