Question 1105766: (a) What is the level of significance? State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test?
(b) Identify the sampling distribution you will us: the standard normal or Student’s t. Explain the rationale for your choice. What is the value of the sample test statistic?
(c) Find (or estimate) the P − value. Sketch the sampling distribution and show the area corre- sponding to the P − value.
(d) Find the critical value(s).
(e) Based on your answers for parts (a) to (d), will you reject or fail to reject the null hypothesis? Interpret your decision in the context of the application.
36. A night club change ownership. Before the change the average sales used to be $24’952 a day with a standard deviation σ = $1904. A random sample of 38 days under the new management gave a sample mean daily average of $25’894 a day. Does this indicate that the population mean daily sales are now more than they used to under old management? Use a 1% level of significance.
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! Level of significance is 0.01.
Ho=no change
Ha:there is some change from the previous value
I would use a two-tailed test because it's not clear which way the change is gone, and a two-tailed test is more conservative.
use a z-test, because sigma is known, and critical value is |z(0.995)|> 2.576
z=(change in mean)/sigma/sqrt(n)
=942*sqrt(38)/1904=3.05
This is greater than the critical value, so there is strong evidence at the 1% level that there is a difference. There has been a significant increase in the average sales and they are now more than they used to be.
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