Statistics Problems - 10

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2. Award: 0.20 points    

A real estate agent in the coastal area of Georgia wants to compare the variation in the selling price of homes on the oceanfront with those one to three blocks from the ocean. A sample of 21 oceanfront homes sold within the last year revealed the standard deviation of the selling prices was $45,600. A sample of 18 homes, also sold within the last year, that were one to three blocks from the ocean revealed that the standard deviation was $21,330. At the 0.01 significance level, can we conclude that there is more variation in the selling prices of the oceanfront homes? 1. Identify the null and the alternate hypothesis. Null hypothesis: a. b. c.

a b c

2. Alternate hypothesis: a. b. c.

a b c

c. What is the decision rule? Use the 0.01 significance level. (Round your answer to 2 decimal places.)

Reject H0 if F>

d. What is the value of F? (Round your answer to 2 decimal places.)

Value of F

e. At the 0.01 significance level, can we conclude that there is more variation in the selling prices of the oceanfront homes?

H0. We conclude that there is more variation in the selling prices of the oceanfront homes.

≤σ21 σ 2 2

≥σ21 σ 2 2

=σ21 σ 2 2

>σ21 σ 2 2

<σ21 σ 2 2

≠σ21 σ 2 2

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References

Worksheet Difficulty: 2 Intermediate Learning Objective: 12-01 Apply the F distribution to test a hypothesis that two population variances are equal.