Question

You have a requirement for specific telecommunications components. A single telecommunications manufacturer provides these components to the general public. The estimated cost of these components is $145,000.

a) True
b) False

Answer 1

To evaluate if the pricing has a larger standard deviation than claimed, calculate the sample standard deviation and use a hypothesis test, such as a chi-square test, at a 5 percent significance level. A significant result could affect a potential buyer's decision.

Step-by-step explanation:

Often in statistical analysis, we aim to determine whether a set of observations could have come from a population with a particular characteristic. In the case presented, we have a claim by a computer manufacturer that the average retail price of a specific computer is $1,249 with a standard deviation of $25. We have been presented with various retail prices collected from a website, and we need to assess whether these prices reflect a larger standard deviation than the one claimed.

To analyze this, we would typically calculate the sample standard deviation of the provided prices and conduct a hypothesis test to see if there is enough evidence to reject the manufacturer's claim. For this scenario, we would use a chi-square test to compare the sample variance against the claimed variance at a 5 percent significance level.

If the calculated sample standard deviation is significantly larger than $25, then we have evidence to reject the manufacturer's claim. As a potential buyer, if we found that the standard deviation is indeed larger, it would imply that there is more price variability than originally stated, and this could influence our purchasing decision