A certain type of calculator battery has a mean lifetime of 100 hours and a standard deviation of σ = 10 hours. A company has developed a new battery and claims it has a longer mean life. A random sample of 1000 batteries is tested, and their sample mean lifetime is x̄ = 101 hours. A test was made of the hypotheses

a. Show that H0 is rejected at the α = 0.01 level.

b. The battery manufacturer says that because the evidence is strong that μ > 100, you should be willing to pay a much higher price for its battery than for the old type of battery. Do you agree? Why or why not?

Transcribed Image Text:

Ho: = 100 : > 100