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Upscale restaurant You are thinking about opening a restaurant and are searching for a good location. From the research you have done, you know that the mean income of those living near the restaurant must be over \(85,000to support the type of upscale restaurant you wish to open. You decide to take a simple random sample of 50people living near one potential site. Based on the mean income of this sample, you will perform a test at the

α=0.05 significance level of H0:μ=\)85,000versus Ha:μ>\(85,000, where μ is the true mean income in the population of people who live near the restaurant. The power of the test to detect that μ=\)86,000is 0.64 Interpret this value.

Short Answer

Expert verified

There is 64 percent probability that finds the convincing proof to help the alternative hypothesisμ>$85000

Step by step solution

01

Given information

H0:μ=$85000H1:μ>$85000μA=alternativemean=$86000

α=significancelevel=0.05

Power =0.64=64%

02

Concept

When the alternative hypothesis is true, the power is the probability of rejecting the null hypothesis.

03

Explanation

If the genuine mean income in the population of persons who live near the restaurant is $86000 there is a 64 percent chance that the alternative hypothesis μ>$85000 will be supported.

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Most popular questions from this chapter

An opinion poll asks a random sample of adults whether they favor banning ownership of handguns by private citizens. A commentator believes that more than half of all adults favor such a ban. The null and alternative hypotheses you would use to test this claim are

а.H0:p∧=0.5;Ha:p∧>0.5H0:p^=0.5;Ha:p^>0.5.

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A random sample of 100 likely voters in a small city produced 59 voters in favor of Candidate A. The observed value of the standardized test statistic for performing a test of H0:p=0.5H0:p=0.5versus Ha:p>0.5Ha:p>0.5

is which of the following?

a)z=0.59-0.50.59(0.41)100

b)z=0.59-0.50.5(0.5)100

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d)z=0.5-0.590.5(0.5)100

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