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    Test statistics/directional research hypothesis

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    An entrepreneur owns two hotels, one in the western region of a certain state and the other in the eastern region. He thinks that the average amount spent by guests for lunch at his Friendly Café-West is less than $34.50, the average amount spent for lunch by guests at his similar Friendly Café-East. A random sample of 100 luncheon checks at Friendly Café-West shows a mean of $30.95. Given an assumed population sigma = $5.50, find the obtained test statistic. Show your procedure. If the owner chose a directional research hypothesis with 5% risk, the critical value would be z = -1.65. Explain what he should do.

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    Solution Summary

    Test statistics and directional research hypothesis is used to analysis two hotels in different regions. The solution explains what the owner of the two hotels should do.