Question

A restaurant that bills its house account monthly is concerned that the average monthly bill exceeds $200 per account. A random sample of 16 accounts is selected, resulting in a sample mean of $210 and a standard deviation of 20. Using a level of significance of 0.01, can we conclude that the average monthly bill is greater than $200 per account?

1. What is Ho and H1?

2. What is the Decision Rule?

3. What is the computed value of the test statistic?

4. What is the decision regarding Ho? What can we conclude?

5. Compute and Interpret the p-value.

Answer 1

Solution :

= 200

= 210

=20

n = 16

This is the right tailed test .

The null and alternative hypothesis is ,

H0 :    = 200

Ha :     200

Test statistic =t

= ( - ) / / n

= (210 -200 ) / 20 / 16

= 2

Test statistic =t = 2

P-value =0.0320

= 0.01

P-value >

0.032 > 0.01

Fail to reject the null hypothesis .

There is insufficient evidence to suggest that