The average price of homes sold in the medium size city in Canada in the past year was $220,000. A random sample of 81 homes sold this year showed an average price of $210,000 with a sample standard deviation of $36,000. Determine whether there has been a significant decrease in the average price of homes.
- State the null and alternative hypotheses to be tested.
- Compute the test statistic.
- Determine the critical value for this test at the 0.05 level of significance.
- What do you conclude?
- Construct a 95% confidence interval for the average price of homes sold this year.