A report in LTO stated that the average age of taxis in the Philippines is 9 years. An operations manager of a large taxi company selects a sample of 40 taxis and finds the average age of the taxis is 8.2 years. The o if the population is 2.3 years. At a = 0.05, can it be concluded that the average age of the taxis in his company is less than the national average?
Null and alternative hypotheses:
Because is known and we can use the z-test.
In z-table, the area corresponding to is 0.0139. Because the test is a left-tailed test, the P-value is equal to the area to the left of so,
Because the P-value is less than =0.05, we reject the null hypothesis, there is enough evidence at the 5% level of significance to support the claim that the average age of the taxis in this company is less than the national average.
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