Question: A recent study found that consumers are making average monthly debt payments of $983 (Experian.com, November 11, 2010). The accompanying table shows a portion of

A recent study found that consumers are making average monthly debt payments of $983 (Experian.com, November 11, 2010). The accompanying table shows a portion of average debt payments for 26 metropolitan areas. The complete data set, labeled Debt_Payments, can be found on the text website.

CityDebt Payments

Washington, D.C.........$1,285

Seattle.............1,135

: ............... :

Pittsburgh.........763

S O U RC E: www.Experian.com, November 11, 2010.

a. State the null and the alternative hypotheses in order to test whether average monthly debt payments are greater than $900.

b. What assumption regarding the population is necessary to implement this step?

c. Use Excel to calculate the value of the test statistic and the exact p-value.

d. At α = 0.05 , are average monthly debt payments greater than $900? Explain.

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