The PGA and Golf Digest have developed the Play Golf America program, in which t

Question

The PGA and Golf Digest have developed the Play Golf America program, in which teaching professionals at participating golf clubs provide a free 10-minute lesson to new customers. According to Golf Digest (July 2008), golf facilities that participate in the program gain, on average, $2,400 in green fees, lessons, or equipment expenditures. A teaching professional at a golf club believes that the average gain in greens fees, lessons, or equipment expenditures for participating golf facilities exceeds $2,400.

1.) In order to support the claim made by the teaching professional, what null and alternative hypotheses should you test?

2.) Suppose you select ? = .05. Interpret this value in the words of the problem.

3.) For ? = .05, specify the rejection region of a large- sample test.

Explanation / Answer

1)

Null Hypothesis: The average gain in greens fees, lessons, or equipment expenditures for participating golf facilities is less than equal to $2,400

H0: mu <= $2,400

Alternate Hypothesis: The average gain in greens fees, lessons, or equipment expenditures for participating golf facilities exceeds $2,400

Ha: mu > $2,400

2) alpha = 0.05 implies that we test for a maximum 5% probability that the Null Hypothesis is true

Thus, if p value < alpha we reject the Null Hypothesis

3) alpha = 0.05

large sample implies we can use z statistic

Critical value for alpha = 0.05 is 1.65

Rejection region is: Reject the Null hypothesis if test stat > +1.65

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