experience in investigating insurance claims show that the averagecost to process a claim is approximately normally distributed witha mean of $80.new cost-cutting measures were started and a sampleof 25 claims was tested .the sample mean of the costs to processthese claims was $ 76 and the sample standard deviation of thecosts was $10.we would like to test whether the cost-cuttingmeasures seem to be working at the 5% significance level.

Question

experience in investigating insurance claims show that the averagecost to process a claim is approximately normally distributed witha mean of $80.new cost-cutting measures were started and a sampleof 25 claims was tested .the sample mean of the costs to processthese claims was $ 76 and the sample standard deviation of thecosts was $10.we would like to test whether the cost-cuttingmeasures seem to be working at the 5% significance level.

a) state the null and alternative hypotheses for thistest.

b) find the critical value for this test.

c)calculate the test statistic

d)should we reject or fail to reject the nullhypothesis?

e)based on your answers to a-d ,what is your conclusion aboutthe cost cutting measures?

Answer 1

This was answered in a previous post.