Question
Executives at Sale Mart Supermarket claim that a typical family of four spends $200 weekly on routine, non-holiday, grocery purchases. According to published industry standards,
Executives at Sale Mart Supermarket claim that a typical family of four spends $200 weekly on routine, non-holiday, grocery purchases. According to published industry standards, the population standard deviation is $25.
Stella, a stats intern at the chain's corporate headquarters, wonders if that original claim by the executives seems too low. As a project, she collects from store sales receipts a simple random sample (SRS) of size 64. The sample mean for the weekly grocery purchases for a family of four is $205. She is defining as rare, or unusually high, any sample mean that is in the top 5% of all possible sample means; hence, she is testing at the5%level of significance. What conclusion should Stella draw, based on the available evidence?
What two-tailed confidence level corresponds to a one-sided significance level of 5%?
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