It has become more common for shoppers to "comparison shop" using the Internet. Respondents to a survey in 2013 who owned cell phones were asked whether they had, in the past 30 days, looked up the price of a product while they were in a store to see if they could get a better price somewhere else. Here is a table of their responses by income level. Complete parts a) and b) below.

_ <$30K $30K-$49.9K $50K-$74.9K >$75K

Yes 157 109 148 243

No 729 439 239 448

.

a) Is the frequency of comparison shopping of comparison shopping on the Internet independent of the income level of the income level of the respondent? Perform an appropriate chi-square test and state your conclusion. State the null and alternative hypotheses for testing whether income level and cybershopping are related. Choose the correct answer below.

A. H0: Income level and cybershopping are not independent.

Upper H Subscript Upper AHA: Income level and cybershopping are independent.

B. H0: Income level and cybershopping are independent.

HA: Income level and cybershopping are not independent.

C. H0: A person with a high income level is less likely to cybershop.

HA: A person with a high income level is more likely to cybershop.

D. H0: A person with a high income level is more likely to cybershop.

HA: A person with a high income level is less likely to cybershop.

Compute the Compute the X2 Statistic

X2= ........... (Round to two decimal places as needed.)

State the appropriate conclusions about the hypotheses. Choose the correct answer below.

1. Reject the null hypothesis. Income level and cybershopping are independent.
2. Fail to reject the null hypothesis. Income level and cybershopping are independent.
3. Fail to reject the null hypothesis. Income level and cybershopping are not independent.
4. Reject the null hypothesis. Income level and cybershopping are not independent.

Your answer is correct.

b) Calculate and examine the standardized residuals. What pattern, if any, do they show that would be of interest to retailers concerned about cybershopping comparisons? Complete the table below.

<$ 30 $30-49.9 $ 49.9-74.9 >75

YES ----- --------- --------- --------

NO ____ ______ ______ _____

Round to five decimal place as needed

What pattern is shown?

1. Shoppers are more likely to cybershop for comparison prices if they earn more money.

Your answer is correct.

1. Cybershopping is the best form of comparison shopping for people who earn less money.
2. Shoppers are less likely to cybershop for comparison prices if they earn more money.
3. Cybershopping is the best form of comparison shopping for people who earn more money