Question

A tourist agency in Hawaii claims the mean daily cost of meals and lodging for a family of 4 traveling in Hawaii is at most $650 with a standard deviation of $40. You work for a consumer protection advocate and want to test this claim. In a random sample of 45 families of 4 traveling in Hawaii, the mean daily cost of meals and lodging is $657. At € α = 0.05, do you have enough evidence to reject the tourist agency’s claim>

a. H0 : Ha :

b.  α

c. Determine z

d. draw picture graph, find p - value

e. Compare

f. Make a decision

g. Conclusion

Answer 1

a)

Ho: ≤ 650

Ha: > 650

b) α = 0.05

c)

z stat = 1.174

z critical (right tailed test) = 1.65

d)Graph:

P(z > 1.174) = 1- P(z < 1.174) = 1- 0.879 = 0.121

p value = 0.121

e & f) As the p value (0.121) is greater than 0.05, we fail to reject the Null hypothesis.

As the z stat does not fall in the rejection area, we fail to reject the Null hypothesis.

(g) Hence, we do not have sufficient evidence to believe that mean daily cost of meals and lodging for a family of 4 traveling in Hawaii is greater than 650.