It has been reported that the average credit card debt for college seniors at the college book store for a specific college is $3262. The student senate at a large university feels that their seniors have a debt much less than this, so it conducts a study of 50 randomly selected seniors and finds that the average debt is $2995, and the population standard deviation is $1100. With α = 0.05, is the student senate correct?
Perform each of the following steps.
a. State the hypotheses and identify the claim.
b. Find the critical value(s).
c. Compute the test value.
d. Make the decision.
e. Summarize the results.
Use diagrams to show the critical region (or regions), and use the traditional method of hypothesis testing unless otherwise specified.