Math Problem Statement

A car manufacturer sells 4 vehicle models that come with 3 different option packages. A sample of 840 vehicle sales is collected to test if the model and option package people chose are independent of each other. Use a 0.05 significance level. Calculate the test statistic and p-value (rounded to four decimal places). Choose the appropriate conclusion based on statistical terms and non-technical terms.

Solution

From the image provided, this is a chi-squared test of independence problem, where you need to test if the car model and package options are independent using the given data.

Here's how you proceed:

  1. Set Up Hypotheses:

    • Null Hypothesis (H0H_0): The model and package options are independent.
    • Alternative Hypothesis (H1H_1): The model and package options are not independent.
  2. Degrees of Freedom:

    • Formula: df=(rows1)×(columns1)df = (rows - 1) \times (columns - 1)
    • With 4 models and 3 packages: df=(41)×(31)=3×2=6df = (4 - 1) \times (3 - 1) = 3 \times 2 = 6.
  3. Expected Values:

    • Calculate the expected frequencies for each cell using the formula: Eij=(row total)×(column total)grand totalE_{ij} = \frac{(row \ total) \times (column \ total)}{grand \ total}
  4. Chi-Square Test Statistic (χ2\chi^2):

    • Formula: χ2=(OijEij)2Eij\chi^2 = \sum \frac{(O_{ij} - E_{ij})^2}{E_{ij}} where OijO_{ij} is the observed frequency.
  5. P-Value:

    • Use a chi-squared distribution table or calculator to find the p-value based on the calculated χ2\chi^2 and df=6df = 6.

Once you compute the test statistic and p-value, compare the p-value with the significance level (α=0.05\alpha = 0.05) to determine whether to reject H0H_0.

Would you like me to calculate the expected values, χ2\chi^2, and p-value for you? Let me know!


  1. What are the steps to compute expected frequencies for this test?
  2. How do degrees of freedom impact the chi-squared distribution?
  3. Why is a significance level (e.g., 0.05) essential in hypothesis testing?
  4. What does rejecting H0H_0 imply about the independence of variables?
  5. How is the p-value interpreted in the context of hypothesis testing?

Tip: Always double-check observed and expected values to avoid errors in chi-square calculations.

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Math Problem Analysis

Mathematical Concepts

Chi-Squared Test of Independence
Hypothesis Testing
Significance Levels

Formulas

Degrees of Freedom: df = (rows - 1) × (columns - 1)
Expected Value: Eij = (row total × column total) / grand total
Chi-Square Test Statistic: χ² = Σ((Oij - Eij)² / Eij)

Theorems

Chi-Squared Distribution
Hypothesis Testing Framework

Suitable Grade Level

College/Undergraduate Level