An auto manufacturing company wants to estimate the variance of miles per gallon
ID: 3127612 • Letter: A
Question
An auto manufacturing company wants to estimate the variance of miles per gallon for its auto model AST72. A random sample of 24 cars of this model showed that the standard deviation of miles per gallon is 0.58. At the alpha = 1%, can the research department conclude that the population variance of miless per gallon for AST72 is decreased from historical value of 0.35?
Select one:
A. At alpha = 1%, they reject the null hypothesis. The variance of miles per gallon for AST72 model has not decreased from the historical value of 0.35.
B. At alpha = 1%, they failed to reject the null hypothesis. The variance of miles per gallon for AST72 model has not decreased from the historical value of 0.35.
C. At alpha = 1%, they failed to reject the null hypothesis. The variance of miles per gallon for AST72 model has decreased from the historical value of 0.35.
D. At alpha = 1%, they reject the null hypothesis. The variance of miles per gallon for AST72 model has not decreased from the historical value of 0.35.
Explanation / Answer
At alpha = 1%, they failed to reject the null hypothesis. The variance of miles per gallon for AST72 model has decreased from the historical value of 0.35.