Question

Miss Gillmore claims that the percentage of restaurants that opened in Stars Hollow in the early 1980's and are still in business today is higher than 60%. We took a random sample of 43 restaurants that opened in Stars Hollow in the early 1980's, and 27 were still in business today. Using the data, perform a hypothesis test to test Miss Gillmore's claim using significance level=0.10.

Answer 1

Total number of sample (n) = 43
number of favourable events (X) = 27

We are interested in testing the hypothesis

Since, the test is two-tail test at \alpha = 0.1

Decision Rule: Reject the null hypothesis if the test statistic value is greater than the critical value 1.28155
The statistic value, 0.3735 is less than the critical values 1.28155. Therefore, we fail to reject the null hypothesis.