The average price of homes sold in the U.S. in the past year was $220,000 . A random sample of 81 homes sold this year showed an average price of $210,000 . It is known that the standard deviation of the population is $36,000 . At a 5% level of significance, test to determine if there has been a significant decrease in the average price of homes
a. State the null and alternative hypotheses to be tested.
b. Compute the test statistic.
c. Determine the critical value for this test.
d. What do you conclude?
e. Compute the p-value.
a. H0: ? ? $220,000
Ha: ? < $220,000
b. Test statistic z = -2.5
c. Critical z = -1.645
d. Reject H0 and conclude that there has been a significant decrease in the average price of homes.
e. p-value = .0062
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