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Math Help - testing hypothesis question

  1. #1
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    testing hypothesis question

    A fast food franchiser is considering building a restaurant at a certain location. According to a financial analysis, a site is acceptable only if the number of pedestrians passing the location averages more than 100 per hour. A random sample of 50 hours produced x bar = 110 and s = 12 pedestrians per hour.

    a) Do these data provide sufficient evidence to establish that the site is acceptable? Use a = 0.05.

    b) What are the consequences of Type 1 and Type 2 errors? Which error is more expensive to make?

    first of all, how do I start this question, is it the same as making null hypothesis and alternative hypothesis here?
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  2. #2
    Grand Panjandrum
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    Re: testing hypothesis question

    Quote Originally Posted by wopashui View Post
    A fast food franchiser is considering building a restaurant at a certain location. According to a financial analysis, a site is acceptable only if the number of pedestrians passing the location averages more than 100 per hour. A random sample of 50 hours produced x bar = 110 and s = 12 pedestrians per hour.

    a) Do these data provide sufficient evidence to establish that the site is acceptable? Use a = 0.05.

    b) What are the consequences of Type 1 and Type 2 errors? Which error is more expensive to make?

    first of all, how do I start this question, is it the same as making null hypothesis and alternative hypothesis here?
    What are you trying to establish? Its negation would make a good candidate for the null hypothesis. In this case that would give a null hypothesis that the site was not acceptable.

    CB

    CB
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