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# Computing the criterion value

• Standard deviation for the sample of 100 households is $4,000. The standard error of the mean (sx) is given by: • Critical mean household income xc through the following two steps: • Determine the critical z-value, zc. For Î± = 0.05: • zc = 1.645 • Substitute the values of zc, s, and Î¼ (under the assumption that H0 is "just" true ) • xc = Î¼ + zcs =$19,658

Decision Rule:
If the sample mean household income is greater than \$19,658, reject the null hypothesis and introduce the new course