The Average Cost of Tuition Plus Room and Board for a Small

Multiple Choice

The average cost of tuition plus room and board for a small private liberal arts college 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. The population standard deviation is $1,200. Let α = 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