Question

A major Blu-ray rental chain is considering opening a new store in an area that currently does not have any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area are equipped with Blu-ray players. It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have Blu-ray players.

The decision on the hypothesis test using a 5% level of significance is _________.

		to fail to reject H0 in favor of H1.
		We cannot tell what the decision should be from the information given.
		to reject H0 in favor of H1.
		to accept H0 in favor of H1.

Answer 1

p= 5000 / 2000 = 0.25

n= 300, x= 96, = 5%= 0.05

Hypothesis is

Ho: P 0.25

Ha: P > 0.25

Calculate test statistics

z = 2.80

test statistics= 2.80

calculate P-Value

P-Value = 1 - P(z < 2.80)

find P(z < 2.80) using normal z table

P(z < 2.80)= 0.9974

P-Value = 1 - 0.9974

P-Value = 0.0026

since (P-Value = 0.0026 ) < ( = 0.05)

Null Hypothesis is rejected.

to reject H0 in favor of H1.