1. An insurance company is entering a new area, which is demographically very similar to other areas where it sells insurance. The average based on these areas is $20450. They are, however, concerned that the claims in this new area may actually be higher. They randomly select 50 claims, and calculate a sample mean of $21050. Assuming that the standard deviation of claims is $4500, and set = :05, test to see if the insurance company's concern is valid.
2. When you moved, your friend told you that the average weekly grocery bill in your town is $150. You believe that it is higher. You took a sample of 25 individuals and asked them for their grocery bills and found that the average is $160.3 and the standard deviation for the sample is $29.5. Set up your null and alternative hypothesis and do the analysis using =.05.