Start off by stating your hypotheses, how to calculate the test statistic, and what distribution it comes from. This is an average so it involves a mean: what hypothesis tests deal with means?
The average cost of tuition, room and board at small private liberal arts colleges is reported to be $8,600 per term and a population standard deviation of $950, but a financial administrator believes that the average cost is higher. A study conducted using 200 small liberal arts colleges showed that the average cost per term is $8,660. Given
an alpha of 0.05. Establish the rejection region and calculate the test statistic. Determine the conclusion if the financial administrator believes that the average cost is higher.