The Average Cost of Tuition, Room and Board at Small

Multiple Choice

The average cost of tuition, room and board at small private liberal arts colleges is reported to be $8,500 per term, but a financial administrator believes that the average cost is higher. A study conducted using 350 small liberal arts colleges showed that the average cost per term is $8,745 with a standard deviation of $1,200. Let = 0.05. Based on the computed test statistic or p-value, what is our decision about the average cost?

A) Equal to $8,500
B) Greater than $8,500
C) Less than $8,500
D) Not equal to $8,500