Question

In 2018, homes in East Baton Rouge (EBR) Parish sold for an average of $239,000. You take a random sample of homes in Ascension parish and find that the average home sale price was $246,000 in 2018. You test the hypothesis that the mean of the home prices from Ascension parish is higher than the EBR mean. Suppose the p-value for the test is 0.045. At the 0.10 level of significance your conclusion is:_______

A. There is evidence that the average home price of homes sold in Ascension parish in 2018 is higher than the average price of homes sold in EBR parish.
B. There is no evidence that the average home price of homes sold in Ascension parish in 2018 is higher than the average price of homes sold in EBR parish.
C. There is not enough information for decision-making.

Answer 1

Option B: There is no evidence that the average home price of homes sold in Ascension parish in 2018 is higher than the average price of homes sold in EBR parish

Explanation:

We are given;

Population mean of EBR Parish; μ1 = $239,000

Sample mean of Ascension parish; x2 = $246,000

P-value = 0.045

Population mean of Ascension parish; μ1 =?

Now,let's define the hypothesis;

Null Hypothesis; H0: μ2 = μ1

Alternative hypothesis; Ha: μ2 > μ1

Now, we are told that the level of significance is 0.1.

Thus; α = 0.1

Now,the level of significance of 0.1 is greater than the p-value which is 0.045 and thus we will fail to reject the null hypothesis and conclude that there is not enough evidence to conclude that the average home prices in Ascension parish in 2018 is higher than the average price of homes sold in EBR parish.