Originally Posted by
Thatgirl Any help is appreciated; I am more or less just trying to figure out if I did this right.
Also for the question I have:
-stated the null and alternative hypothesis
-stated the critical region to reject or fail to reject the null
-Identified the test stat
-found the test stat
-stated the conclusion.
The question:
The transit company of a large city bases its fare on the assumption that 30% of riders pay reduced fares. A random sample of 1600 riders showed that 451 of them paid a reduced fare. At the 0.05 level of significance should the transit company continue to base fares on this assumption?
My answer:
Ho: p=0.30 H1: p=/=0.30
Critical region: Reject Ho if the test statisitc does not fall between 1.96 and -1.96. Fail to reject Ho if the test statistic falls between 1.96 and -1.96.
z=-1.75
test statistic = 0.0401*2=0.0802
There is not sufficient evidence to warrant rejection of the claim that 30% of its riders pay reduced fares.
Yes, the transit company should continue to base fares on this assumption.
Thanks in advance for you review! It is greatly appreciated.