# Computing the criterion value

- Standard deviation for the sample of 100 households is $4,000. The standard error of the mean (s
_{x}) is given by:

- Critical mean household income x
_{c}through the following two steps:- Determine the critical z-value, z
_{c}. For Î± = 0.05:**z**_{c}= 1.645

- Substitute the values of z
_{c}, s, and Î¼ (under the assumption that H_{0 }is "just" true )**x**_{c}=**Î¼****+ z**_{c}s = $19,658

- Determine the critical z-value, z

**Decision Rule:**

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