One of the most difficult things to do in statistics is to determine the correct hypothesis test to do for a given scenario.

Determine the null hypothesis and the alternative hypothesis:

Each year, Kiplinger's compiles its list of Best Value Cities. One of the statistics used in this ranking is the cost-of living index compiled by the US Department of Labor Bureau of Labor Statistics. The index measures the cost of living in a city relative to the national average of 100. In 2011, Pueblo Colorado had the lowest index (84), while New York City had an index of 118. The following table lists the cost of living for seven southeastern US cities.

CityCost of Living Index (US mean=100)

Charlotte, NC93.0

Birmingham, AL89.6

Florence, SC100

Tampa, FL92.1

Atlanta, GA 95.2

Knoxville, TN89.7

Miami, FL107.7

Is the true mean cost of living index for Southeatern US cities lower than the national mean cost of living index of 100? Test at 2% significance level.

Choose the correct HO and HA statements:

a)HO: Southeast=National

HA: Southeast>National

b)HO: Southeast=National

HA: Southeast

c)HO: Southeast=National

HA: SoutheastNational

d)HO: PSoutheast=PNational

HA: PSoutheastPNational