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91Ó°ÊÓ

The manager of the Danvers-Hilton Resort Hotel stated that the mean guest bill for a weekend is \(\$ 600\) or less. A member of the hotel's accounting staff noticed that the total charges for guest bills have been increasing in recent months. The accountant will use a sample of weekend guest bills to test the manager's claim. a. Which form of the hypotheses should be used to test the manager's claim? Explain. \\[ \begin{array}{lll} H_{0}: \mu \geq 600 & H_{0}: \mu \leq 600 & H_{0}: \mu=600 \\ H_{\mathrm{a}}: \mu<600 & H_{\mathrm{a}}: \mu>600 & H_{\mathrm{a}}: \mu \neq 600 \end{array} \\] b. What conclusion is appropriate when \(H_{0}\) cannot be rejected? c. What conclusion is appropriate when \(H_{0}\) can be rejected?

Short Answer

Expert verified
Use \(H_0: \mu \leq 600\) and \(H_a: \mu > 600\). If \(H_0\) cannot be rejected, the manager's claim stands; if \(H_0\) is rejected, the mean exceeds \$600.

Step by step solution

01

Analyze the Claim

The manager's claim is that the mean guest bill for a weekend is \(\$600\) or less. This indicates that the manager believes \( \mu \leq 600\), where \( \mu \) represents the mean guest bill.
02

Formulate Null Hypothesis \(H_0\)

Based on the manager's claim, the null hypothesis should be that the mean guest bill is \( \$600 \) or less. Thus, we formulate the null hypothesis as \( H_0: \mu \leq 600 \).
03

Formulate Alternative Hypothesis \(H_a\)

The accountant suspects that the charges have been increasing, which would mean the mean is above \(\$600\). Therefore, the alternative hypothesis that challenges the manager's claim is \( H_a: \mu > 600 \).
04

Decide Hypotheses Pair

The appropriate pair of hypotheses for this test based on the manager's claim and the accountant's suspicion is \( H_0: \mu \leq 600 \) and \( H_a: \mu > 600 \).
05

Conclusion for Failure to Reject \(H_0\)

If \( H_0 \) cannot be rejected, we conclude there is insufficient evidence to say that the mean guest bill is greater than \(\$600\). Thus, we retain the manager's claim.
06

Conclusion for Rejection of \(H_0\)

If \( H_0 \) can be rejected, we conclude that there is enough evidence to support the claim that the mean guest bill is greater than \(\$600\), contradicting the manager's claim.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Null Hypothesis
In hypothesis testing, the null hypothesis is a fundamental concept. It is essentially the starting assumption that there is no significant effect or difference. In the context of this exercise, the null hypothesis is designed to reflect the manager's claim about the mean guest bill. According to the manager, this mean bill should be, in statistical terms, \(\\)600\( or less.
This null hypothesis is denoted by \( H_0: \mu \leq 600 \). It states the average weekend bill is at or below \)600. This assumption forms the baseline that all statistical testing will measure against.
An important thing to remember about the null hypothesis is that it is assumed to be true until evidence suggests otherwise. This means when we conduct a hypothesis test, our goal initially is not to prove the null hypothesis true but rather to challenge it with an alternative hypothesis.
  • The null hypothesis assumes no change or no effect.
  • It sets the stage for comparison with the alternative hypothesis.
  • Initial assumption considered true until statistically proven otherwise.
Alternative Hypothesis
The alternative hypothesis is a critical part of hypothesis testing. It directly challenges the null hypothesis. In the example of the hotel manager, the alternative hypothesis is that the mean guest bill is more than \$600. This suspicion is expressed mathematically as \( H_a: \mu > 600 \).
The purpose of the alternative hypothesis is to present a statement that we test against the null hypothesis. If sufficient evidence exists to support the alternative hypothesis, we then can reject the null hypothesis.
Formulating the alternative hypothesis requires a good understanding of what needs to be tested or what the suspected change is for a given scenario. In this case, because the accountant suspects an increase in the billing amounts, the alternative hypothesis suggests the mean billing is greater than the stated average.
  • Proposes a new effect or difference contrary to the null.
  • Supported when evidence is sufficient to reject the null hypothesis.
  • Represents the claim for which we are seeking evidence.
Statistical Conclusion
After conducting a hypothesis test, we reach a statistical conclusion, which informs us whether there is enough evidence to reject the null hypothesis or not. This conclusion impacts how we interpret the results and what actions might follow.
In our scenario with the hotel manager, if the result of the test allows us to reject \( H_0 \), we conclude there is enough evidence to state the mean guest bill exceeds \$600, suggesting an increase contrary to the manager's original claim. This would mean the alternative hypothesis has been supported by the data.
However, if \( H_0 \) cannot be rejected, the conclusion is that there is insufficient evidence to claim a higher mean billing. It doesn't necessarily mean the null hypothesis is true, but rather that the data does not provide strong enough evidence against it.
  • Derived from analysis of the hypothesis test results.
  • Determines whether or not we can reject the null hypothesis.
  • Influences subsequent actions and interpretations based on the evidence.

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Most popular questions from this chapter

The average annual total return for U.S. Diversified Equity mutual funds from 1999 to 2003 was \(4.1 \%\) (BusinessWeek, January 26,2004 ). A researcher would like to conduct a hypothesis test to see whether the returns for mid-cap growth funds over the same period are significantly different from the average for U.S. Diversified Equity funds. a. Formulate the hypotheses that can be used to determine whether the mean annual return for mid-cap growth funds differ from the mean for U.S. Diversified Equity funds. b. \(\quad\) A sample of 40 mid-cap growth funds provides a mean return of \(\bar{x}=3.4 \%\). Assume the population standard deviation for mid-cap growth funds is known from previous studies to be \(\sigma=2 \% .\) Use the sample results to compute the test statistic and \(p\) -value for the hypothesis test. c. \(\quad\) At \(\alpha=.05,\) what is your conclusion?

Individuals filing federal income tax returns prior to March 31 received an average refund of \(\$ 1056 .\) Consider the population of "last-minute" filers who mail their tax return during the last five days of the income tax period (typically April 10 to April 15 ). a. A researcher suggests that a reason individuals wait until the last five days is that on average these individuals receive lower refunds than do early filers. Develop appropriate hypotheses such that rejection of \(H_{0}\) will support the researcher's contention. b. For a sample of 400 individuals who filed a tax return between April 10 and \(15,\) the sample mean refund was \(\$ 910 .\) Based on prior experience a population standard deviation of \(\sigma=\$ 1600\) may be assumed. What is the \(p\) -value? c. \(\quad\) At \(\alpha=.05,\) what is your conclusion? d. Repeat the preceding hypothesis test using the critical value approach.

On Friday, Wall Street traders were anxiously awaiting the federal government's release of numbers on the January increase in nonfarm payrolls. The early consensus estimate among economists was for a growth of 250,000 new jobs (CNBC, February 3,2006 ). However, a sample of 20 economists taken Thursday afternoon provided a sample mean of 266,000 with a sample standard deviation of 24,000 . Financial analysts often call such a sample mean, based on late-breaking news, the whisper number. Treat the "consensus estimate" as the population mean. Conduct a hypothesis test to determine whether the whisper number justifies a conclusion of a statistically significant increase in the consensus estimate of economists. Use \(\alpha=.01\) as the level of significance.

In 2001 , the U.S. Department of Labor reported the average hourly earnings for U.S. production workers to be \(\$ 14.32\) per hour (The World Almanac, 2003 ). A sample of 75 production workers during 2003 showed a sample mean of \(\$ 14.68\) per hour. Assuming the population standard deviation \(\sigma=\$ 1.45,\) can we conclude that an increase occurred in the mean hourly earnings since \(2001 ?\) Use \(\alpha=.05\).

A shareholders' group, in lodging a protest, claimed that the mean tenure for a chief executive officer (CEO) was at least nine years. A survey of companies reported in The Wall Street Journal found a sample mean tenure of \(\bar{x}=7.27\) years for CEOs with a standard deviation of \(s=6.38\) years (The Wall Street Journal, January 2, 2007). a. Formulate hypotheses that can be used to test the validity of the claim made by the shareholders' group. b. Assume 85 companies were included in the sample. What is the \(p\) -value for your hypothesis test? c. At \(\alpha=.01,\) what is your conclusion?

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