Discuss the following:
Q1. Because of the expense involved, car crash tests often use small samples. When five BMW cars are crashed under standard conditions, the repair costs (in dollars) are used to test the claim that the mean repair cost for all BMW cars is less than $1000. Minitab is used for a hypothesis test and we find that t = -1.83 with a prob-value of 0.071. Based on the accompanying results of this hypothesis test, would BMW be justified in advertising that under the standard conditions, the repair costs average less than $1000.
Q2. An experiment was conducted to test the effects of alcohol. The errors were recorded in a test of visual and motor skills for a treatment group of people who drank ethanol and another group give a placebo. The results are shown in the accompanying table (based on data from "Effects fo Alcohol Intoxication on Risk Taking, Strategy, and Error Rate in Visuomotor Performance," by Streufert et al., Journal of Applied Psychology, Vol. 77, No. 4). Construct a 95% confidence interval estimate of the difference between the two population means. Do the results support the common belief that drinking is hazardous for drivers, pilots, ship captains, and so on? Why or why not?
Treatment Group Placebo Group
n1 = 22 n2 = 22
x-bar1 = 4.20 x-bar2 = 1.71
s1 = 2.20 s2 = 0.72