Here are the essential concepts you must grasp in order to answer the question correctly.
Null Hypothesis (H0)
The null hypothesis is a statement that indicates no effect or no difference, serving as a default position that assumes any observed variation is due to chance. In this context, it asserts that the standard deviation of the base price of an ATV is less than or equal to $320, which is a claim that needs to be tested.
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Alternative Hypothesis (H1)
The alternative hypothesis is a statement that contradicts the null hypothesis, suggesting that there is an effect or a difference. For this scenario, the alternative hypothesis would state that the standard deviation of the base price of an ATV is greater than $320, indicating a significant deviation from the null hypothesis.
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Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about the validity of a hypothesis based on sample data. It involves calculating a test statistic and comparing it to a critical value to determine whether to reject the null hypothesis in favor of the alternative hypothesis, thus providing a framework for making inferences about population parameters.
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