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how do you find the level of significance? I use a TI-84 calculator, and I don't know how to find it. Especially on a word problem that gives you a list of numbers.

 

Ex: Jane hears in the news that the national average gas price for a gallon is 2.79. She believes in her city, the average is lower. She drives around and picks out 12 gas stations(prices below). If gas prices are normally distributed with a standard deviation of 14 cents, does she have evidence at the .05 significance level that her city's average gas price is lower than the national average?

 

Prices: 2.65   2.81   2.76   2.84   2.49   2.67   2.83   2.78   2.51   2.86   2.70   2.74

 

I do not know how to get the significance value when you have a big long list like this. PLEASE HELP A LOST COLLEGE STUDENT

 

Thanks!

Guest Mar 8, 2017
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The lowest 5% of a normal distribution is about 1.645 standard deviations below the mean. So if her city's average price is less than 2.79 - 1.645*0.14 = 2.56 then it is significantly lower than the national average at the 0.05 significance level. If it is not lower than this then it is not significantly lower at the 0.05 level.  

 

To find the average of her city's gas price, add up the twelve prices given and divide by 12.

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Alan  Mar 8, 2017

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