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A major issue facing many states is whether to legalize casino gambling. Suppose the govenor of one state believes that more than 55% of the state's registered voters would favor some form of legal casino gambling. However before backing a proposal to allow such gambling, the govenor has instructed his aides to conduct a statistical test on the issue. To do this, the aides have hired a consulting firm to survey a simple random sample of 300 voters in the state. Of these 300 voters, 175 actually favored legalized gambling.

1: State the appropriate null and alternative hypotheses.
2: Assuming that a significance level of 0.05 is used, what conclusion should the governor reach based upon these samples data?

#### Solution Preview

Null hypothesis:
H0: P=0.55
Alternative hypothesis:
H1: p≠0.55
Level of significance:
α = 0.05
Critical value ...

#### Solution Summary

Hypothesis testing business applications are examined in this posting. The solution determines whether to legalize casino gambling.

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