At the time she was hired as a server at the Grumney Family Restaurant, Beth Bri

Question

At the time she was hired as a server at the Grumney Family Restaurant, Beth Brigden was told, “You can average $85 a day in tips.” Assume the population of daily tips is normally distributed with a standard deviation of $4.50. Over the first 47 days she was employed at the restaurant, the mean daily amount of her tips was $86.06. At the .01 significance level, can Ms. Brigden conclude that her daily tips average more than $85?

(a) State the null hypothesis and the alternate hypothesis.

H0: 85 ; H1: > 85

H0: 85 ; H1: < 85

H0: = 85 ; H1: 85

H0: >85 ; H1: = 85

(b) State the decision rule.

Reject H1 if z > 2.33

Reject H1 if z < 2.33

Reject H0 if z < 2.33

Reject H0 if z > 2.33

(c) Compute the value of the test statistic. (Round your answer to 2 decimal places.) Value of the test statistic _______

(d) What is your decision regarding H0 ?

Reject H0

Do not reject H0

(e) What is the p-value? (Round your answer to 4 decimal places.) p-value _________

Explanation / Answer

As per multiple subparts rules, we are supposed to answer first four subparts.

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