Recall, from Chapter 14, that with a small sample size, we lose the use of the central limit theorem, so, therefore, we need to assume that the population is normally distributed for all cases in this section. The first case that we’ll examine is when we know σ**,** the population standard deviation.

When σ is known, the hypothesis test reverts back to the large sample size case. We can do this because we are now assuming the population is normally distributed. We can demonstrate this method with the following example.

Opening up my monthly cell phone bill lately has become a nerve-wracking experience. As I warily open the envelope, I wonder what surprises await me. ...

Start Free Trial

No credit card required