PSTAT 109: Quiz 9 Winter 2014 Solution

PSTAT 109: Quiz 9

Winter 2014

Instructions: Please show all formulas and calculations in an organized fashion for full credit.

Problem 1.Because of the expense involved, car crash tests often use small samples. When

ve BMW cars are crashed under standard conditions, the average repair costs (in dollars)

is $1159.40 with a standard deviation of $284.73. Assuming BMW repair costs are approx-

imately normally distributed, use a 0.05 signicance level to test the validity of the claim

that the mean repair costs for all BMW cars is less than $1000. Would BMW be justied in

advertising that under the standard conditions, the repair costs are less than $1000?