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Hypothesis Testing: Cigarette Advertisement Case

Recall that the cigarette industry requires that models in cigarette ads must appear to be at least 25 years old.

Also recall that a sample of 50 people is randomly selected at a shopping mall. Each person in the sample is shown a typical cigarette ad and is asked to estimate the age of the model in the ad.

a: Let mu be the mean perceived age estimate for all viewers of the ad, and suppose we consider the industry requirement to be met if mu is at least 25. Set up the null and alternative hypotheses needed to attempt to show that the industry requirement is not being met.

b: Suppose that a random sample of 50 perceived age estimates gives a mean of x-bar = 23.663 years and a standard deviation of s = 3.596 years. Use these sample data and critical values to test the hypotheses of part a at the .10, .05, .01, and .001 levels of significance.

c: How much evidence do we have that the industry requirement is not being met?

d: Do you think that this result has practical importance? Explain your opinion.

Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.