1. AP Statistics: Section 12.1 B

2. Example: A bank wonders if omitting the annual credit card fee for customers who charge at least $2400 a year would increase the amount that customers charge on its credit cards. The bank makes this offer to a SRS of 200 of its credit card customers. It then compares the amount these customers charged this year to the amount they charged last year. The mean increase is $332 and the standard deviation is $108. a) Is there significant evidence at the 1% level that the mean amount charged increases under the no- fee offer?

3. Hypothesis: Conditions:

4. Calculations: Interpretation:

5. b) Construct and interpret a 99% confidence interval for the mean amount of the increase omitting the annual credit card fee for customers who charge at least $2400 a year would increase the amount that customers charge on its credit cards.

6. c) Does our work in parts a & b show that omitting the annual credit card fee for customers who charge at least $2400 a year caused an increase the amount that customers charge on its credit cards?

7. d) Briefly describe the design of an experiment to study the no-fee offer.

8. The t procedures are robust against non-Normality of the population except when _________ or _________________ are present. (Skewness is more serious than other kinds of non-Normality). Review the guidelines in the box “Using the t-procedures” on page As the sample size increases, the ______ ensures that the distribution of the sample mean becomes more nearly Normal and the t-distribution becomes more accurate for calculating p-values.

9. The power of a statistical test measures its ability to detect deviations from the ____. The power of the one-sample t -test against a specific alternative value of the population mean is the probability that the test will _____________ when the mean has the alternative value.