REQUIREMENT:

Step 1: State the null and alternative hypotheses. Step 2: Level of Significance. Step 3: Select the test statistics. Step 4: Formulate the decision rule. Step 5: Compute the value of the test statistic. Step 6: Make a decision.

1. As input for a new inflation model, the average cost of a hypothetical basket of basic commodities in the Central Luzon region was predicted by economists to be P1,468. The standard deviation of basket prices was assumed to be P95, a figure that has held fairly constant over the years. To check this prediction, a sample of 36 baskets representing different parts of the region was checked in late July, and the average cost was P1,498. Let of = 0. 05. Is the difference between the economists' prediction and the sample men statistically significant