Two years ago, the average acres of farms in a certain geographic region was 55 acres.

Question

Two years ago, the average acres of farms in a certain geographic region was 55 acres. The standard deviation of the population was 10 acres. A recent study consisting of 25 farms showed that the average was 64 acres per farm. Assume that σ has not changed and the variable is normally distributed. Using the critical value approach and at α= 0.05, compute for the critical value (CV) of this hypothesis test. Get the absolute value of CV.

Answer 1

In Excel, use the t.inv function.

So:

=t.inv(.05,25-1) This will give you a CV of -1.71 for the left side of the bell curve.

=t.inv(1-.05,25-1) This will give you a CV of 1.71 for the right side of the bell curve.