Each year, Kiplinger’s compiles its list of Best Value Cities.  One of the statistics used in this ranking is the cost-of-living index compiled by the US Department of Labor Bureau of Labor Statistics. The index measures the cost of living in a city relative to the national average of 100. In 2011, Pueblo Colorado had the lowest index (84), while New York City had an index of 118. The following table lists the cost of living for seven Southeastern US cities:

City

Cost of Living Index (US mean = 100)

Charlotte, NC

93.0

Birmingham, AL

89.6

Florence, SC

100.0

Tampa, FL

92.1

Atlanta, GA

95.2

Knoxville, TN

89.7

Miami, FL

107.7

Is the true mean cost of living index for Southeastern US cities lower than the national mean cost-of-living index of 100? Test to 2% significance level.

Choose the correct HO and Hstatements:

Question 7 options:

A) 

HO : μSoutheast = μNational

HA :  μSoutheast < μNational

B) 

HO : pSoutheast = pNational

HA :  pSoutheast ≠ pNational

C) 

HO : μSoutheast = μNational

HA :  μSoutheast ≠ μNational

D) 

HO : μSoutheast = μNational

HA :  μSoutheast > μNational

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