Hypotheses testing and decision rules. Data have been collected from two casual

Question

Hypotheses testing and decision rules. Data have been collected from two casual dining restaurants in a Midwestern city. a. Formulate the null hypothesis (H0) and the alternative hypothesis (H1) to determine if statistical evidence suggests that the average profit per customer in restaurant A is greater than the average profit per customer in restaurant B. b. Is this hypothesis test a one-sample test or a two-sample test? c. Is this hypothesis test a lower one-tailed test, an upper one-tailed test, or a two-tailed test? d. State the decision rule for this hypothesis.

Explanation / Answer

Answer to the question is as follows:

a.

Ho: MuA <= MuB

Ha: MuA > MuB

b. Since 2 samples are involved that of A and B , it is a 2-sample test

c. The hypothesis is a direcctional test ( i.e. one direction) , therefore it' a 1 tailed test

d. The decision rule is : If the test statistic is more than the critical value then we reject null hypothesis and 'accept' the claim. We conclude that statistical evidence suggests that the average profit per customer in restaurant A is greater than the average profit per customer in restaurant B.

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