A small restaurant owner believes exactly 36 % of his customers come to the rest

Question

A small restaurant owner believes exactly 36 % of his customers come to the restaurant because of his daily half-price specials. He is interested in expanding his daily specials and increasing the price. However, he would like to test his hypothesis prior to expanding the daily special offerings. He intends to use the following null and alternative hypotheses. Ho: p = 0.36 Ha: p 0.36 These hypotheses _______________.

A. indicate a one-tailed test with a rejection area in the right tail

B. indicate a one-tailed test with a rejection area in the left tail

C. indicate a two-tailed test

D. are established incorrectly

E. are not mutually exclusive

Explanation / Answer

As we are testing the proportion equality here, therefore this is a non directional two sided test.

Therefore the given hypothesis indicates a two tailed test.

Note that the proportion can be greater or less than 0.36, in both those cases the null hypothesis would be rejected, therefore we are checking from both sides here.

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