The Average Cost of Tuition and Room and Board at a Small

question 10

Multiple Choice

The average cost of tuition and room and board at a small private liberal arts college is reported to be $8,500 per term, but a financial administrator believes that the average cost is higher. A study conducted using 350 small liberal arts colleges showed that the average cost per term is $8,745. The population standard deviation is $1,200. Let α = 0.05. What is the critical z value for this test?

• A)+1.960
• B)-1.960
• C)+1.645
• D)-1.645

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Definitions:

Null Hypothesis

A hypothesis used in statistics that proposes no significant difference or effect, serving as a default position until evidence suggests otherwise.

Test Statistic

A value calculated from sample data during a hypothesis test, used to make a decision about the null hypothesis.

P-Value

A statistical measure that helps to determine the strength of the results to support or reject the null hypothesis.

Null Hypothesis

A hypothesis that assumes there is no statistical significance in a set of given observations and that any observed difference is due to sampling or experimental error.