The Department of Transportation Would Like to Test the Hypothesis

question 116

Multiple Choice

The Department of Transportation would like to test the hypothesis that the average age of cars on the road is less than 12 years. A random sample of 45 cars had an average age of 10.6 years. It is believed that the population standard deviation for the age of cars is 4.1 years. The Department of Transportation would like to set α = 0.05. The conclusion for this hypothesis test would be that because the test statistic is _________.

• A)more than the critical value, we can conclude that the average age of cars on the road is less
• B)less than the critical value, we cannot conclude that the average age of cars on the road is less than 12 years
• C)less than the critical value, we can conclude that the average age of cars on the road is less than 12 years
• D)more than the critical value, we cannot conclude that the average age of cars on the road is less than 12 years

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Definitions:

Permitted Deductions

Allowable subtractions from gross income that reduce taxable income, as defined by tax laws.

Flat Tax

A tax system with a constant rate, where taxpayers pay the same percentage of their income regardless of the level of their income.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Average Tax Rate

The proportion of total income paid in taxes, calculated by dividing total tax amount by total income.