One of the issues that came up in a recent municipal election was the high cost of housing. A candidate seeking to unseat an incumbent claimed that the average family spends more than 30% of its annual income on housing. A housing expert was asked to investigate the claim. A random sample of 125 households was drawn, and each household was asked to report the percentage of household income spent on housing costs.
a. Is there enough evidence to infer that the candidate is correct?
b. Using a confidence level of 95%, estimate the mean percentage of household income spent on housing by all households.
c. What is the required condition for the techniques used in Parts a and b? Use a graphical technique to check whether it is satisfied.