Question

The ticketing agency of the Vancouver Whitecaps football team would like to test the hypothesis that the average price of a ticket is less than $225 on the secondary market. A random sample of 40 customers paid an average of $207 for their ticket. Assume that the standard deviation of the price of tickets for Whitecaps games is $43. The Vancouver Whitecaps would like to set α = 0.01. Use the p value approach to test this hypothesis. What will be your decision? (3 points)

Answer 1

The null and alternative hypothesis is ,

H0 :   = 225

Ha : < 225

= 207

= 43

n = 40

Test statistic = z =

= ( - ) / / n

= (207 - 225 ) / 43 / 40

Test statistic = z = -2.65

This is the left tailed test,

P(Z < -2.65 )

P-value = 0.004

= 0.01  

P-value <

Reject the null hypothesis .