A travel analyst claims the mean daily base price for renting a full-size or less expensive vehicle in Vancouver, British Columbia, is more than $86. You want to test this claim. In a random sample of 40 full-size or less expensive vehicles available to rent in Vancouver, British Columbia, the mean daily base price is $93.23. Assume the population standard deviation is $28.90. At α=0.10, do you have enough evidence to support the analyst’s claim?
Table of contents
- 1. Intro to Stats and Collecting Data55m
- 2. Describing Data with Tables and Graphs1h 55m
- 3. Describing Data Numerically1h 45m
- 4. Probability2h 16m
- 5. Binomial Distribution & Discrete Random Variables2h 33m
- 6. Normal Distribution and Continuous Random Variables1h 38m
- 7. Sampling Distributions & Confidence Intervals: Mean1h 53m
- 8. Sampling Distributions & Confidence Intervals: Proportion1h 12m
- 9. Hypothesis Testing for One Sample2h 19m
- 10. Hypothesis Testing for Two Samples3h 22m
- 11. Correlation1h 6m
- 12. Regression1h 4m
- 13. Chi-Square Tests & Goodness of Fit1h 20m
- 14. ANOVA1h 0m
9. Hypothesis Testing for One Sample
Performing Hypothesis Tests: Means
Problem 7.RE.27
Textbook Question
In Exercises 27 and 28, (a) identify the claim and state H0 and Ha, (b) find the critical value(s) and identify the rejection region(s), (c) find the standardized test statistic z, (d) decide whether to reject or fail to reject the null hypothesis, and (e) interpret the decision in the context of the original claim.
A substance abuse counselor claims that the mean annual drug overdose death rate for the 50 states is at least 25 deaths per 100,000 people. In a random sample of 30 states, the mean annual drug overdose rate is 22.48 per 100,000 people. Assume the population standard deviation is 10.69 deaths per 100,000. At α=0.01, is there enough evidence to reject the claim?

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Step 1: Identify the claim and state the null hypothesis (H0) and the alternative hypothesis (Ha). The claim is that the mean annual drug overdose death rate for the 50 states is at least 25 deaths per 100,000 people. This translates to H0: μ ≥ 25 (the null hypothesis) and Ha: μ < 25 (the alternative hypothesis, which is the complement of the claim). This is a left-tailed test because the alternative hypothesis is testing for a value less than 25.
Step 2: Determine the critical value(s) and rejection region(s). Since this is a left-tailed test with a significance level of α = 0.01, use the standard normal (Z) distribution table to find the critical value corresponding to α = 0.01. The rejection region will be in the left tail of the Z-distribution, where Z is less than the critical value.
Step 3: Calculate the standardized test statistic (z). Use the formula for the Z-test statistic for a population mean: z = (x̄ - μ) / (σ / √n), where x̄ is the sample mean (22.48), μ is the hypothesized population mean (25), σ is the population standard deviation (10.69), and n is the sample size (30). Substitute the given values into the formula to compute z.
Step 4: Compare the calculated test statistic (z) to the critical value. If the test statistic falls in the rejection region (i.e., if z is less than the critical value), reject the null hypothesis. Otherwise, fail to reject the null hypothesis.
Step 5: Interpret the decision in the context of the original claim. If the null hypothesis is rejected, conclude that there is enough evidence to reject the counselor's claim that the mean annual drug overdose death rate is at least 25 deaths per 100,000 people. If the null hypothesis is not rejected, conclude that there is not enough evidence to reject the claim.

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Key Concepts
Here are the essential concepts you must grasp in order to answer the question correctly.
Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about a population based on sample data. It involves formulating two competing hypotheses: the null hypothesis (H0), which represents a statement of no effect or no difference, and the alternative hypothesis (Ha), which represents the claim being tested. In this case, H0 states that the mean annual drug overdose death rate is less than 25, while Ha claims it is at least 25.
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Step 1: Write Hypotheses
Critical Value and Rejection Region
The critical value is a threshold that determines the boundary for rejecting the null hypothesis in hypothesis testing. It is derived from the significance level (α), which indicates the probability of making a Type I error. The rejection region is the range of values for the test statistic that leads to rejecting H0. For this problem, with α=0.01, the critical value will help identify if the sample mean significantly deviates from the hypothesized mean.
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Critical Values: t-Distribution
Standardized Test Statistic (z)
The standardized test statistic, often denoted as z, measures how many standard deviations an element is from the mean. It is calculated using the sample mean, population mean under H0, population standard deviation, and sample size. In this scenario, calculating the z-value will help determine if the observed sample mean of 22.48 is significantly lower than the hypothesized mean of 25, thus aiding in the decision to reject or fail to reject H0.
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Step 2: Calculate Test Statistic
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