Answer
Step 1 : $H_0$: µ = 117.91 dollars, $H_1$: µ $\ne$ 117.91 dollars
Step 2: Since α = 0.1/2 = 0.05, and the test is a two-tailed test, the critical values are -1.645 and +1.645.
Step 3:
$\bar{X}$ = 117.91 dollars, µ = 122.57 dollars, σ = 20, n = 36
Test value = z = $\frac{\bar{X}- µ }{σ / \sqrt n}$
= $\frac{117.91 dollars - 122.57 dollars }{20 / \sqrt 36}$
= -1.398
Step 4 : Since the test value falls within the critical value, the decision is not to reject the null hypothesis.
Step 5: There is not enough evidence to support the claim that at the 0.1 level of significance, the mean cost differs from 117.91 dollars.
