Suppose that BC financial aid alots a textbook stipend by claiming that the average textbook at...

Solution:

The null and alternative hypothesis in symbol would be:

H₀: µ = 62.74

H₁: µ ≠ 62.74

The null hypothesis in words would be:

The average price of all textbooks from the store is $62.74.

The point estimate is 73.740.

[The point estimate for population mean is the sample mean.]

Confidence interval for Population mean is given as below:

Confidence interval = x̄ ± Z*σ/sqrt(n)

From given data, we have

x̄ = 73.74

σ = 10

n = 110

Confidence level = 95%

Critical Z value = 1.96

(by using z-table)

Confidence interval = x̄ ± Z*σ/sqrt(n)

Confidence interval = 73.74± 1.96*10/sqrt(110)

Confidence interval = 73.74 ± 1.96*0.9535

Confidence interval = 73.74 ± 1.8688

Lower limit = 73.74 - 1.8688 = 71.871

Upper limit = 73.74 + 1.8688 =75.609

Confidence interval = (71.871, 75.609)

The 95% confidence interval is: 71.871 to 75.609

Based on this we:

Reject the null hypothesis

[We reject the null hypothesis because the hypothesized value of µ = 62.74 is not lies within the above confidence interval.]