(a) State the Null and Alternative (b) Is it Left-, Right-, or Two-Tailed? (c) Find the standardized test statistic. (d) What is the decision? (e) Interpret the results

Question

1.    A tourist agency in Florida claims the mean daily cost of meals and lodging for a family of four traveling in Florida is $252. You want to test this claim and in a random sample of 50 families of four traveling to Florida, the mean daily cost of meals and lodging is $260 with a standard deviation of $25. Use a 5% level of significance to test the agency’s claim.

Answer 1

The given information are X = $260, μ = $252, σ = $25, and n = 50 families.

H_o: μ = $252

H_A: μ ≠ $252

z-statistic = (260 - 252)/(25/√50) = 2.26

z-critical = 1.96

Since the z-statistic is greater than the critical value, we can reject the null hypothesis. There is sufficient evidence that shows the mean daily cost of meals and lodging for a family of four traveling in Florida according to the tourist agency is $252.