Question

In a study entitled How Undergraduate Students Use Credit Cards, it was reported that undergraduate students have a mean credit card balance of $3173 (Sallie Mae, April 2009). This figure was an all-time high. Assume that a current study is being conducted to determine if it can be concluded that the mean credit card balance for undergraduate students has continued to increase compared to the April 2009 report. Based on previous studies, use a population standard deviation = $1000.

State the Null and the alternative hypothesis

Answer 1

To test if the mean credit card balance for undergraduates has increased since April 2009, we state the null hypothesis as no change from the mean of $3,173, and the alternative hypothesis as an increase from this mean.

Step-by-step explanation:

In the scenario described, a study is being conducted to determine if the mean credit card balance for undergraduate students has increased from the previously reported figure of $3,173, which was the average in April 2009. To set up the statistical test, we would state the hypotheses as follows:

• The null hypothesis (H0): The mean credit card balance for undergraduate students = $3,173.
• The alternative hypothesis (Ha): The mean credit card balance for undergraduate students > $3,173.

The null hypothesis signifies no change in the mean credit card balance since the April 2009 report, while the alternative hypothesis indicates that the mean balance has indeed continued to increase.