Problem Set #3 J) The amount of income spent on housing is an important component of the cost of living. The total costs of housing for homeowners might include mortgages payments, property taxes, and utility costs (water, heat, electricity). An economist selected a sample of Inland Empire, California, homeowners and calculated housing costs as a percent of monthly income, 5 years ago and now. The information is reported below. Is it reasonable to conclude the percent is less now than 5 years ago? Apply the 6-step hypothesis testing procedure to test using a = 5% (0.05). (LMW) Five Years Now Ago Aziz 18 11 Baker 19 38 Cortez 28 36 Duran 42 26 Edgewort 35 11 Foster 44 42 Gomez 46 Hochhack 20 27 Isoko 48 27 Jarvis 48 25 Kenda 36 33 Li 17 33 Morales 24 22 Nasser 32 11 Oliphant 43 39 Pierce 45 43 Quest 29 23 Rawlins 28 18 Sorrento 40 36 Thomas 23 13
Problem Set #3 J) The amount of income spent on housing is an important component of the cost of living. The total costs of housing for homeowners might include mortgages payments, property taxes, and utility costs (water, heat, electricity). An economist selected a sample of Inland Empire, California, homeowners and calculated housing costs as a percent of monthly income, 5 years ago and now. The information is reported below. Is it reasonable to conclude the percent is less now than 5 years ago? Apply the 6-step hypothesis testing procedure to test using a = 5% (0.05). (LMW) Five Years Now Ago Aziz 18 11 Baker 19 38 Cortez 28 36 Duran 42 26 Edgewort 35 11 Foster 44 42 Gomez 46 Hochhack 20 27 Isoko 48 27 Jarvis 48 25 Kenda 36 33 Li 17 33 Morales 24 22 Nasser 32 11 Oliphant 43 39 Pierce 45 43 Quest 29 23 Rawlins 28 18 Sorrento 40 36 Thomas 23 13
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Problem Set #3
J) The amount of income spent on housing is an important component of the cost of living. The total
costs of housing for homeowners might include mortgages payments, property taxes, and utility
costs (water, heat, electricity). An economist selected a sample of Inland Empire, California,
homeowners and calculated housing costs as a percent of monthly income, 5 years ago and now.
The information is reported below. Is it reasonable to conclude the percent is less now than 5
years ago? Apply the 6-step hypothesis testing procedure to test using a = 5% (0.05). (LMW)
Five
Years
Now
Ago
Aziz
18
11
Baker
19
38
Cortez
28
36
Duran
42
26
Edgewort
35
11
Foster
44
42
Gomez
46
Hochhack
20
27
Isoko
48
27
Jarvis
48
25
Kenda
36
33
Li
17
33
Morales
24
22
Nasser
32
11
Oliphant
43
39
Pierce
45
43
Quest
29
23
Rawlins
28
18
Sorrento
40
36
Thomas
23
13
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