An auditor reviewed 25 oral surgery insurance claims from the particular surgical office, finding that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with the standard deviation of $78.11.
a) At the 5 percent level of significance, does this sample prove the violation of guideline that the average patient must pay no more than $250 out-of-pocket? State your hypotheses and decision rule.
b) Is this a close decision?
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Hypotheses:
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H0: _ = 250 vs. _ > 250
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Level of Significance:
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5%
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Decision Rule
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Reject the null hypothesis if p-value < 0.05
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Calculation:
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Hypothesis Test: Mean vs. Hypothesized Value
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Hypothesized value
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250.0000
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Mean Sample
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275.6600
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std. dev.
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78.1100
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std. error
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15.6220
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n
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25
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df
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24
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t
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1.64
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p-value (one-tailed, upper)
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.0568
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