Paul wants to compare whether the prices of tangerines in two supermarkets differ significantly. He has been noting down the daily prices for the last few days and has found the difference in the sample means to be 20 cents. If the standard deviation of the distribution of the difference between sample means is 28 cents and we are testing the null hypothesis at the 95% confidence level, which statement is true?
a.The difference between the two means is significant at the 95% confidence level, so the null hypothesis must be rejected. b.The difference between the two means is not significant at the 95% confidence level, so the alternative hypothesis must be rejected. c.The difference between the two means is not significant at the 95% confidence level, so the null hypothesis must be rejected. d.The difference between the two means is not significant at the 95% confidence level, so the alternative hypothesis must be accepted. e.The difference between the two means is significant at the 95% confidence level, so the alternative hypothesis must be rejected.
Since you can only reject or fail to reject the null hypothesis, you are left with choices A and C. There are two options when it comes to evidence. You can have convincing evidence to reject the null, or there could not be convincing evidence to fail to reject. However, since we are only given the option to reject the null, there is convincing evidence to show this. This is the same as 'The difference between the two means is significant at the 95% confidence level, so the null hypothesis must be rejected.' Your answer is A.
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