A Pawn Shop Claims to Sell Used Kindles for About

question 16

Multiple Choice

A pawn shop claims to sell used Kindles for about the same price as Amazon or eBay. Both online retailers sell used Kindles for around $150. Below are recent Kindle sales prices for the pawn shop. Using the critical value approach and α = 0.05, the appropriate conclusion is ________.

• A) to reject the null hypothesis; conclude the median sale price is greater than $150
• B) do not reject the null hypothesis; we cannot conclude the median sale price is greater than $150
• C) to reject the null hypothesis; we cannot conclude the median sale price is greater than $150
• D) do not reject the null hypothesis; conclude the median sale price is greater than $150

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Definitions:

Critical Value

A point on the scale of a test statistic beyond which we reject the null hypothesis and conclude that the observed data are unlikely under the assumed model.

Obtained Value

In statistics, the actual value measured or calculated during an experiment or study.

Null Hypothesis

A statement in hypothesis testing that there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

T Test

A statistical method that evaluates whether there is a significant difference between the averages of two distinct groups.