Verify middle class families allocate larger amount on food

Reference no: EM13148753

An advertising firm's single best client is a food manufacturer. This food manufacturer wants to fine tuned its brand development efforts; enlisting the help of the advertising firm. Advertising firm's data showed that among 280 middle class families, ave. monthly food expenditures amounted to $15,366 with a standard deviation of $2585. In comparison, similar data involving 420 poor families showed an ave. of $7,640 with a standard deviation of $3,022.

A.) Verify that middle class families allocate a statistically larger average amount on food than poor families using the firm's data. Use a 5% significance level in your verification.

B.) Test that the standard deviation in the food allocation of poor families is at most $4,000. Use a 5% significant level.

Reference no: EM13148753

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