The Average Cost of Tuition, Room and Board at Community $\alpha$

question 87

Multiple Choice

The average cost of tuition, room and board at community colleges is reported to be $8,500 per year, but a financial administrator believes that the average cost is higher. A study conducted using 150 community colleges showed that the average cost per year is $9,000 with a standard deviation of $1,200. Let $\alpha$ = 0.05. Given the following megastat printout, explain the meaning of the p-value.

• A) There is a 1.67% chance of getting these sample results if the null hypothesis is true.
• B) There is a 16.7% chance of getting these sample results if the null hypothesis is true.
• C) There is an incredibly small chance of getting these sample results if the null hypothesis is true; therefore we have strong evidence to support that college costs are more than $8,500.
• D) There is an incredibly large chance of getting these sample results if the null hypothesis is true; therefore we are unable to reject the claim that college costs are $8,500.

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Definitions:

Supply Increases

A situation where the quantity of a good or service that producers are willing to supply at a certain price rises.

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Supply Decreases

A situation in which the quantity of a product or service that producers are willing and able to sell at all possible prices falls.

Demand Increases

A situation where there is a rise in the quantity of a product or service that consumers are willing and able to purchase at a given price.