10.

At Ajax Spring Water, a half-liter bottle of soft drink is supposed to contain a mean of 519 ml. The filling process follows a normal distribution with a known process standard deviation of 6 ml.

(a)

The normal distribution should be used for the sample mean because (You may select more than one answer. Click the box with a check mark for the correct answer and click to empty the box for the wrong answer.)

	the sample population has a large mean.
	the population distribution is known to be normal.
	the population standard deviation is known.
	the standard deviation is very small.

(b)	Set up hypotheses and a two-tailed decision rule for the correct mean using the 5 percent level of significance. The hypothesis for a two-tailed decision is

a.	H0: 519, H1: = 519, reject if z < 1.96 or z > 1.96
b.	H0: 519, H1: = 519, reject if z > 1.96 or z < 1.96
c.	H0: = 519, H1: 519, reject if z > 1.96 or z < 1.96
d.	H0: =519, H1: 519, reject if z > 1.96 or z < 1.96

	a
	b
	c
	d

(c)

If a sample of 16 bottles shows a mean fill of 522 ml, does this contradict the hypothesis that the true mean is 519 ml?

Yes

No

11.

An auditor reviewed 24 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $278.31 with a standard deviation of $78.94.

At the 5 percent level of significance, does this sample prove a violation of the guideline that the average patient should pay no more than $250 out-of-pocket?

(a-1)	H0: $250 versus H1: > $250. Choose the right option.

a.	Reject H0 if tcalc < 1.714
b.	Reject H0 if tcalc > 1.714

	a
	b

(a-2)

Calculate the test statistic. (Round your answer to 2 decimal places.)

Test statistic.........

(a-3)

The null hypothesis should be rejected.

	True
	False

(a-4)

The evidence does show that the average out-of-pocket expense is greater than $250.

	True
	False

(b)

Is this a close decision?

	Yes
	No