Explain Type I and Type II errors.

Explain what a p-value is, and explain how it is used to test a hypothesis.

Fully explain the steps in hypothesis testing using the p-value method.

How do we decide whether to use a z test or a t test in hypothesis testing?

Work through this hypothesis test using the prompts.

A sample of 17 account balances of credit company showed a mean of customer balance of $4,450, but the marketing manager claimed that the mean valance for the population was $4,325. The marketing manager did NOT have the population standard deviation, but the sample standard deviation was found to be $500. Use the p-value approach to conduct a full hypothesis test (all steps) that can be used to determine whether the mean of all account balances is significantly difference from $4,325. Let= .05.

To help you go through the steps of hypothesis testing, follow these prompts:

The null hypothesis is

The alternative hypothesis is

I will use a (choose 1: t/z) in my formula because

I have calculated the value of t (or z) to be

I have used t (or z) to get the value of p (most likely from a chart or computer printout).

My p value is

Alpha, which is given in the problem, is

When I compared p to alpha, p is (choose 1: greater than/less than) alpha.

Because of this, I know I should (choose 1: reject/fail to reject) my null hypothesis.

Choose one: The mean balance is different than $4325 / The mean balance is NOT different than $4325.

Work through this hypothesis test using each step of hypothesis testing. You may want to borrow the steps from the previous problem.

A sample of 51 homes for sale in ABC City showed a mean asking price of $258,000, but the city claimed that the mean asking price for the population was $249,000. The population standard deviation of all homes for sale was $19,000. Use the p-value approach to conduct a full hypothesis (all steps - follow the guidance in the last problem) that can be used to determine whether the mean asking price is significantly greater than $249,000. Let=. 05.