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In a survey conducted by Yahoo Small Business, 1,432 of 1,813 adults surveyed said that they would alter their shopping habits if gas prices remain high (Associated Press, November 30,2005\() .\) The article did not say how the sample was selected, but for purposes of this exercise, assume that the sample is representative of adult Americans. Based on the survey data, is it reasonable to conclude that more than threequarters of adult Americans would alter their shopping habits if gas prices remain high?

Short Answer

Expert verified
The explanation of the outcome completely depends on the Z score calculated in step 3. If the calculated Z score is greater than 1.645 (Z > 1.645), then that will be an evidence to reject the null hypothesis. In this case, it would be reasonable to conclude that more than 75% of American adults would alter their shopping habits if gas prices remain high. However, if the calculated Z score is less than or equal to 1.645 (Z ≤ 1.645), then we would not reject the null hypothesis and the conclusion would be that there is not enough evidence to support the claim.

Step by step solution

01

Statement of Hypotheses

Set up the null hypothesis (\(H_0\)) and the alternative hypothesis (\(H_1\)). Let p represent the population proportion of American adults who would change their shopping habits if gas prices stay high. Here, \(H_0: p \leq 0.75\) (less than or equal to threequarters) and \(H_1: p > 0.75\) (more than threequarters)
02

Calculation of Sample Proportion

Calculate the sample proportion (\(\hat{p}\)). The sample proportion is calculated as the number of successes divided by the sample size. Here, successes refers to adults who said they would change their shopping habits, which is 1,432 of a sample size of 1,813. Therefore, \(\hat{p} = \frac{1432}{1813} = 0.790\)
03

Test Statistic Calculation

Calculate the test statistic which follows a normal distribution, since we assume the sample is representative of adult Americans. This is done using the formula for the Z score in hypothesis testing for proportions: \( Z = \frac{(\hat{p}-p_0)}{\sqrt{(p_0(1-p_0))/n}} \). Here \(p_0\) is the assumed population proportion under the null hypothesis, \(\hat{p}\) is the sample proportion and n is the sample size. Plugging the numbers, we get \( Z = \frac{(0.790-0.75)}{\sqrt{(0.75)(0.25)/1813}} \)
04

Rejection Region and Conclusion

The test is one-tail and at a 0.05 significance level. So, we reject the null hypothesis if Z > 1.645. Using a Z-table or calculator, we calculate Z and compare it to 1.645. We reject the null hypothesis if Z > 1.645, meaning that we will conclude it is reasonable to believe more than three-quarters of adults would alter their shopping habits if calculated Z is bigger than 1.645.

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Key Concepts

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

Sample Proportion
The sample proportion is a fundamental concept in hypothesis testing. It allows researchers to make inferences about a population based on a sample. To find the sample proportion, divide the number of observed successes by the total number of observations. In this context, "successes" refer to the individuals who indicated they would change their shopping habits due to high gas prices.

Given the information from the survey, we calculate the sample proportion (\(\hat{p}\)) as follows:
  • Number of successes (adults willing to change their shopping habits): 1,432
  • Total sample size: 1,813
  • Hence, \(\hat{p} = \frac{1432}{1813} \approx 0.790\)
Therefore, the sample proportion in this survey is approximately 0.790, which means that about 79% of the sampled adults reported a willingness to alter their shopping habits if gas prices remain high.
Test Statistic
In hypothesis testing, calculating the test statistic is a critical step. It helps determine whether there is enough evidence against the null hypothesis. The test statistic for proportions often follows a normal distribution, allowing statisticians to use the Z-test. To calculate the Z-test statistic, apply the formula:
  • \(\hat{p}\): The sample proportion
  • \(p_0\): The population proportion under the null hypothesis
  • n: The sample size
For this survey, we aim to test if the proportion of adults willing to alter their shopping habits is greater than 0.75 (75%). Therefore, using the formula,\[ Z = \frac{(\hat{p}-p_0)}{\sqrt{(p_0(1-p_0))/n}} \]Plug in the known values:
  • \(\hat{p} = 0.790\)
  • \(p_0 = 0.75\)
  • n = 1,813
Calculate the Z-value to see how far \(\hat{p}\) is from \(p_0\), adjusted for sample size. This Z-value will guide the decision to accept or reject the null hypothesis.
Null Hypothesis
The null hypothesis (\(H_0\)) plays a pivotal role in hypothesis testing. It is a statement that there is no effect or no difference, serving as a starting point for testing statistical claims. In this survey, the null hypothesis sets the assumption that no more than three-quarters (75%) of the population would change their shopping habits if gas prices remain high. Thus, the statement is formulated as:\[ H_0: p \leq 0.75 \]The researcher seeks evidence for an alternative—that more than three-quarters would change their shopping habits:\[ H_1: p > 0.75 \]The goal is to determine whether the survey data provides sufficient evidence to reject the null hypothesis in favor of the alternative. This involves calculating the Z statistic and comparing it to a critical value from the Z distribution, which tells us whether the observed data is statistically significant under the null hypothesis.

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Most popular questions from this chapter

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