A fast food company has decided to open a store in a city if more than 70% of th

Question

A fast food company has decided to open a store in a city if more than 70% of the inhabitants eat out more than 3 times each week. The company polls 50 families and finds that 68% of them each out more than 3 times each week. Using 90% confidence level, answer the following questions.

What is the hypothesis test to be done?

Find the test statistic (round to two decimal places).

Which of the following is the correct conclusion?

Find the p-value for the test (answer in decimal, not percentage, form and round to 3 decimal places).

The company should build a restaurant in the town since the null hypothesis is not rejected.

Explanation / Answer

The statistical software output for this problem is:

One sample proportion summary hypothesis test:
p : Proportion of successes
H0 : p = 0.7
HA : p > 0.7

Hypothesis test results:

Hence,

Hypothesis test: z test for proportion

Test statistic = -0.31

Conclusion: The company should not build a restaurant in the town since the null hypothesis is not rejected.

p - Value = 0.621

Proportion Count Total Sample Prop. Std. Err. Z-Stat P-value p 34 50 0.68 0.064807407 -0.3086067 0.6212

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