(Round all intermediate calculations to at least 4 decimal places.) Customers at

Question

(Round all intermediate calculations to at least 4 decimal places.)

Customers at Costco spend an average of $130 per trip (The Wall Street Journal, October 6, 2010). One of Costco's rivals would like to determine whether its customers spend more per trip. A survey of the receipts of 25 customers found that the sample mean was $135.25. Assume that the population standard deviation is $10.50 and that spending follows a normal distribution. Use Table 1.

Specify the null and alternative hypotheses to test whether average spending at the rival’s store is more than $130.

Calculate the value of the test statistic. (Round your answer to 2 decimal places.)

Test statistic?

(Round all intermediate calculations to at least 4 decimal places.)

Customers at Costco spend an average of $130 per trip (The Wall Street Journal, October 6, 2010). One of Costco's rivals would like to determine whether its customers spend more per trip. A survey of the receipts of 25 customers found that the sample mean was $135.25. Assume that the population standard deviation is $10.50 and that spending follows a normal distribution. Use Table 1.

Explanation / Answer

Ans:

a)

H0: 130; HA: > 130

(right tailed test)

b)Test statistic:

z=(135.25-130)*sqrt(5)/10.5=1.118

z=1.12

p-value=P(z>1.12)=0.1314

p-value 0.10

c)p-value=0.1314>0.05

Do not reject H0 since the p-value is greater than .

d)critical z value(right tailed) for alpha=0.05 is 1.64

As,z=1.12<1.64,we do not reject H0.

There is sufficient evidence to suggest that Customers at the rival’s store do not spend more than those at Costco.

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