Information Resources Inc., a Chicago-based research organization, tracks supermarket sales in 28 metropolitan markets in the United States. They convert their data for specific products to an index that measures product usage relative to the national average usage.

For example, Green Bay, Wisconsin's ketchup index is 143, the highest in the nation. This means that Green Bay residents consume 43% more ketchup, on average, than the mean national consumption rate. The table lists the salad dressings index for each in a sample of seven Southeastern cities.

SALAD.DAT

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Salad Dressings Index (U. S. mean = 100) ...............................................................................

Charlotte, N. C. 124 B~rm~ngham. Al.99 Raleigh, N. C. 124 Knoxville, Tenn. 99 Memphis, Tenn. 90 Atlanta, Ga. 111 Nashville, Tenn. 89 Source: Wdl Street Journal Interactwe Edztlon, Jan 5.2000.

a. Specify the appropriate null and alternative hypotheses for testing whether the true mean consumpt~on rate of salad dressings In the Southeastern Un~ted States is d~ffcrenthan the mean nat~onal conwmption rate of 100.

b. What assumptions about the sample and population must hold in order lor it to be appropriate to use a t statistic in conducting the hypothesis test?

c. Conduct the hypothesis test using a = .05.

d. Is the observcd significance level of the test greater or less than .05? Justify your answer.