1. This is case 1, in which the value of population standard deviation is assumed to be

known. a. Compute the standard deviation of the textbook price and assume this to be the population standard deviation. Type this value in E5.

b. Pick a random sample of size 15. c. Compute the mean of your random sample in E4 using the AVERAGE function. d. Calculate the standard error in cell E9 using the equation: S * n. e. Compute the z-statistic in cell E10 using the equation: (mean 180) / s.e. f. Compute the p-value for the lower tailed test in E13.

Use the NORMSDIST equation and refer to your z-statistic calculated in cell E10 g. Calculate the critical z-values for = .01 and .05 in cells I6 and I7.

• Use the NORMSINV function to find the corresponding critical value.

• Decide if you would or would not reject the null hypothesis. Put this in cells K6 and K7

  h. Decide if you would or would not reject the null hypothesis using the p-value as a tool. Put your answer in cell I13.

  i. Repeat the above steps for an upper tailed and two tailed test.

• Remember that your critical z value for upper tailed will be found using (1-) as your probability. P-value is 1 NORMSDIST(E10)

• For a two-tailed test, the critical z value is found using (/2) as your probability. Two-tailed p-value is 2*NORMSDIST(E10)

  2. Case 2 is sigma unknown case. So, calculate the mean and standard deviation using your random sample. a. Calculate the standard error, t-value, and degrees of freedom in cells E30:E32.

See steps above b. Calculate the lower tailed p-value in cell E34.

Use the TDIST(e31, e32, 1) function for this. c. Calculate the critical t-values for = .01 and .05 in cells I27 and I28.

Use the TINV(G27,e32) function for this. d. Decide if you would or would not reject the null hypothesis.

See steps above e. Decide if you would or would not reject the null hypothesis using the p-value as a tool. Put your answer in cell I34.

j. Repeat the above steps for an upper tailed and two tailed test.

• Remember that your critical t value for upper tailed will be found using the same TDIST() formula.

• For a two-tailed test, the critical t value is found using (/2) as your probability. Two-tailed p-value is 2*TDIST().

• 

A B D E F G . - K - L 1 Before After z-test assuming equal means 2 261 254 3 181 175 215 BEFORE St Dey = 4 200 AFTER 36 St Dev = Case #1, Question a = 33.60916525 31 5 242 6 ONE-TAILED 7 186 233 268 244 206 205 223 248 195 254 175 Ho:ub sua Ha:ub > ua 8 9 10 Accept or reject? 234 184 11 261 TWO-TAILED 12 13 14 278 252 299 222 281 Ho: ub=ua Ha: ubua 185 195 15 16 199 Accept or reject? 185 182 17 179 255 18 272 225 19 214 t-test assuming equal variances 20 21 ONE-TAILED 187 196 231 282 22 182 211 207 256 253 Ho:ub sua Ha: ub>ua 23 24 267 25 238 Accept or reject? 228 198 26 189 TWO-TAILED 27 28 273 227 245 204 272 211 251 216 Ho: ub=ua Ha:ub #ua 29 30 31 188 190 Accept or reject? 32 A B D E F G . - K - L 1 Before After z-test assuming equal means 2 261 254 3 181 175 215 BEFORE St Dey = 4 200 AFTER 36 St Dev = Case #1, Question a = 33.60916525 31 5 242 6 ONE-TAILED 7 186 233 268 244 206 205 223 248 195 254 175 Ho:ub sua Ha:ub > ua 8 9 10 Accept or reject? 234 184 11 261 TWO-TAILED 12 13 14 278 252 299 222 281 Ho: ub=ua Ha: ubua 185 195 15 16 199 Accept or reject? 185 182 17 179 255 18 272 225 19 214 t-test assuming equal variances 20 21 ONE-TAILED 187 196 231 282 22 182 211 207 256 253 Ho:ub sua Ha: ub>ua 23 24 267 25 238 Accept or reject? 228 198 26 189 TWO-TAILED 27 28 273 227 245 204 272 211 251 216 Ho: ub=ua Ha:ub #ua 29 30 31 188 190 Accept or reject? 32