Question 16.9

16.9 Price Discrimination?

CASE 16.1 In Examples 16.1 through 16.4, the testing of significance was based on the rank sum of the Used Auto consumers being the first group. Suppose we associate the first group with the Midwest Auto consumers. As noted in the section (page 16-5), the rank sum for Midwest Auto consumers is 55.

used

  1. Find the mean and standard deviation of the rank sum for Midwest Auto consumers under the null hypothesis that markup percents do not differ significantly.
  2. Refer to Example 16.1 where the mean of the rank sum for Used Auto consumers was found. What is the relationship between the two means?
  3. In Example 16.3, the one-sided -value was determined using the rank sum of Used Auto consumers. Show how the same reported -value can be found using the rank sum of Midwest Auto consumers.

16.9

(a) , . (b) , which is the sum of the ranks. (c) , , which is the same as in Example 16.3.