The employees at the East Vancouver oﬃce of a multinational company are demanding higher
Salaries than those offered at the company oﬃce located in Oshawa Ontario. Their justiﬁcation for
The pay difference is that the difference between the average price of single-family houses in East
Vancouver and that in Oshawa is more than $60,000. Before making a decision, the company
Management wants to study the difference in the prices of single-family houses for sale at the two
Locations.
The results of their search of recent house sales are as follows (in $1000, rounded to the nearest
Thousand):

What is the decision at the 5% level of signiﬁcance?
A) Fail to reject the null hypothesis and conclude that the average house prices in East Vancouver are not more than $60,000 greater than those in Oshawa.
B) Since the P-value is less than the t-stat we conclude that the average house prices in East Vancouver are not more than $60,000 greater than those in Oshawa.
C) Since the P-value is so very small, we conclude that the average house prices in East Vancouver are indeed at least $60,000 greater than those in Oshawa.
D) Conclude that the average house prices in East Vancouver are different than those in Oshawa.

If the Decision Is to Reject the Null Hypothesis at the 5

Multiple Choice

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