Question

An automobile manufacturer claims that its car has a 37.2 miles/gallon (MPG) rating. An independent testing firm has been contracted to test the MPG for this car since it is believed that the car has an incorrect manufacturer's MPG rating. After testing 120 cars, they found a mean MPG of 37.1. Assume the standard deviation is known to be 1.1. A level of significance of 0.05 will be used. Make a decision to reject or fail to reject the null hypothesis.

Answer 1

fail to reject the null hypothesis

Explanation:

Based on the information provided I would fail to reject the null hypothesis. This is because the Miles per gallon that the independent testing firm has concluded for the car nearly matches the car's MPG claim. The difference being 0.1 . Since the standard deviation is 1.1 for this test, this means that the average falls perfectly within this range and makes the data very compelling. Combine this with a very low level of significance, I would say that the claim is backed by the data.