1.An average household in California spends $165 per month for health insurance.

Assume a sample of 40 households in LA, showed a sample mean of $159 per month, also assume that the population standard deviation is $23.50.

Test the claim that the average monthly expenditure of the California population is not equal to $165. Use a significance level of 0.03.

a)Formulate the null and alternative hypotheses.

b)What is the rejection rule?

c)What is p-value?

d)What is your conclusion?

e)Is the Claim valid?