Statistics Question! Help please!?

Question by Sara: Statistics Question! Help please!?
Last year, the average cost of making a movie was $ 54.8 million. This year, a random sample of 15 recent action movies had an average production cost of $ 62.3 million with a standard deviation of 9.5 million. Can it be concluded that the average cost of produce an action movie is higher than the movie industry average of $ 54.8 million? (Assume the cost of producing movies is normally distributed).

Claim:
Opp.:
Ho:
H1:

What is the Critical Value?

What is the value of the test statistic?

What is the P-Value?

What is your Conclusion? a) Reject the Ho or b) fail to reject the Ho

Best answer:

Answer by Tiya
Ho: No change hypothesis ie.avg cost of action movie=avg cost in movie industry. u=uo
H1: Avg cost of action movie > avg cots in movie industry . u>uo

Critical Value is depending on your level of significance.I am assuming a 5% level of significance.Reading the 95th percentile off the normal tables your critical value= 1.645. You can choose a significance level(0.01%,0.1%etc.) of your choice depending how sensitive you are to type 1 and 2 type errors.

Value of test statistic:[62.3-54.8]/[9.5/(15^1/2)] = 3.0576..

P Value: P(Z>3.0576..) which is approximately 0.0011

Conclusion: Reject Ho

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