Question

According to the national association of home builders the mean price of an existing single family home in 2018 was $395,000. A real estate broker believes that existing home prices in her neighborhood are lower.

Answer 1

`H_o:\mu = 395000`

`H_a:\mu < 395000`

Explanation:

Given

`\mu = 395000` -- mean price

Required

Determine the null and alternate hypotheses

From the question, we understand that the mean price is:

`\mu = 395000`

This represents the null hypothesis

`H_o:\mu = 395000`

The belief that the home prices are lower represents the alternate hypothesis

Lower means less than

So, the alternate hypothesis is:

`H_a:\mu < 395000`