The average price of homes sold in the U. S. in the past year was $220,000. A random sample of 81 homes sold this year showed an average price of $210,000. It is known that the standard deviation of the population is $36,000. At level of significance (a) 0.05, conduct the hypothesis test to determine if there has been a significant decrease in the average price homes.

There is a significant decrease in the average price homes.

Step-by-step explanation:

Let X represent the prices of homes sold in the U.S. in the past year

given that

Create hypotheses as

(Left tailed test at 5% significance)

Mean difference = -10000

Std error of mean =

Since population std deviation is known, we can do z test

Z = mean diff/std error = -2.50

p value = 0.00621

Since p <0.05 we reject null hypothesis.

There is a significant decrease in the average price homes.

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step-by-step explanation: