Question

1. The average Belgian person drinks approximately 30 gallons of soda a year. Some Belgian legislators are considering instituting a sales tax on soda to raise revenue and possibly fight obesity. Will a sales tax on soda reduce the mean amount of soda consumed? A sales tax is added to a random sample of communities to measure the effect on soda consumption.

1. State the null and alternative hypotheses:

2. If sample results give a p-value of 0.019, what is your general conclusion regarding whether to reject or not reject the null hypothesis?

3. In the context of this situation, explain your conclusion.

Answer 1

1.

Given data,

= 30

Let   be the mean amount of after increasing the sales tax then,

Null hypothesis,

Alternate Hypothesis,

Reason : Since we are checking if the sales tax will reduces the mean amount of soda consumed. It is our alternate hypothesis. Our null hypothesis remains that the same amount of soda will be consumed.

2.

If the p-value is 0.019, assuming that the level of significance a=0.05, we reject the null hypothesis since the p-value < a.

Reason : when the p-value is lesser than the level of significance, we reject the null hypothesis.

3.

In the context of given situation, we reject the null hypothesis(​​​​​​) which states that the amount of soda consumption remains the same even after increase in sales tax and we accept the alternate hypothesis(​​​​​​) that the amount of soda consumption will decrease after the increase in sales tax.