Topic 5

5.4.2 Tutorial Questions

1. Show the null hypothesis (Ho) and the alternative hypothesis (Ha) for the
following key words:

a) ‘mean greater than 30?’

Ho: µ = 30
Ha: µ > 30
b) ‘mean less than 20.2?’
Ho: µ = 20.2
Ha: µ < 20.2

c) ‘mean not 18?’

Ho: µ = 18
Ha: µ ≠ 18

d) ‘mean different from 6?’

Ho: µ = 6
Ha: µ ≠ 6

e) ‘mean changed from 8?”

Ho: µ = 8
Ha: µ ≠ 8

2. Show the rejection regions for the following hypotheses if the significance level is
5%.
a) Ho: µ = 60
H1: µ > 60
RR: Z > Zc where Zc = Z0.05 = 1.645

b) Ho: µ = 60
H1: µ < 60
RR: Z < - Zc where - Zc = Z0.05 = - 1.645
c) Ho: µ = 60
H1: µ ≠ 60
RR: Z > Zc or Z < - Zc where Zc = Z0.05/2 = 1.96
Alternatively show |Z| > Zc where Zc = Z0.025 =1.96

Tutorial 5 Page 1 of 8
 3. For each of the next three exercises:
• Calculate the value of the test statistic (Z calculated)
• Set up the rejection region and show the critical value(s) (Z
critical)
• Interpret the result

a) Ho: µ = 100
Ha: µ > 100
α = 0.05, n = 121, σ = 25, x = 106
RR: Z > Zc where Zc = Z0.05 = 1.645
Test statistic, Z = 2.64
Reject Ho. There is sufficient evidence to show that the
population mean is greater than 100.

b) Ho: µ = 50
Ha: µ < 50
α = 0.01, n = 100, σ = 7, x = 48
RR: Z < - Zc where -Zc = Z0.01 = -2.33
Test statistic, Z = -2.86
Reject Ho. There is sufficient evidence to show that the
population mean is less than 50.

c) Ho: µ = 1000
Ha: µ ≠ 1000
α = 0.10, n = 100, σ = 106, x = 1005
RR: Z > Zc or Z < -Zc, where Zc = Z0.1/2 = 1.645
Test statistic, Z = 0.47
Do not reject Ho. There is insufficient evidence to show that the
population mean is not equal to 1000.

4. Set up the appropriate null and alternative hypotheses for each of the cases below:
a) Joel claims that the average number of sales per week is 400. Phillip doubts
the accuracy of his claim.
b) Mac, a natural risk seeker, is keen to buy this business which has a good
chance of success if the average sales are at least 400 per week. Aaron, his
advisor, suspects that the average may be less.
c) Lou is very careful with his money and will buy the business only if he feels
almost certain of success which requires sales of at least 400 per week. Joel
is showing him a sample of weekly sales figures.
Solution:
a) Ho: µ = 400
Ha: µ ≠ 400
b) Ho: µ = 400
Ha: µ < 400

Tutorial 5 Page 2 of 8
 c) Ho: µ = 400
Ha: µ > 400

Tutorial 5 Page 3 of 8
 5. A highway patrol officer believes that the average speed of cars traveling over a
certain stretch of highway exceeds the posted speed limit of 55 mph. The speeds
of a random sample of 200 cars were found to average 56 mph. The standard
deviation of all speeds is 5 mph.

a) Do these data provide sufficient evidence at the 1% significance level to

support the officer’s belief?
Solution:
Ho: µ = 55
H1: µ > 55
RR: Z > Zc where Zc = Z0.01 = 2.33
x −µ
ZX =
σ
n

= 56 – 55 = 2.83
5/√200
Reject Ho. There is sufficient evidence to show cars exceed the average
speed of 55 mph over a certain stretch of highway.

b) What is the p-value of the test?

Solution: p-value (Z > 2.83) = 0.5 – 0.4977 = 0.002 which is less than
0.01 so we reach the same conclusion as shown in a).

6. A fast-food franchiser is considering building a restaurant at a certain location.

Based on financial analyses, a site is acceptable only if the number of pedestrians
passing the location averages more than 100 per hour. The number of pedestrians
for each of 40 hours was recorded and revealed an average of 106. Assume the
population standard deviation is known to be 121.

a) Can we conclude at the 5% significance level that the site is acceptable?

b) What is the p-value of the test?
Solution: a) Z = 3.16. Reject Ho. There is sufficient evidence to show the
location would be acceptable for building a restaurant. (Zc = 1.645).

b) p-value (Z > 3.16) = 0.5 – 0.5 = 0 which is less than 0.05 so

we reach the same conclusion as above.

1 T
aken from Keller, G. & Warrack, B. (2003) Statistics for Management and Economics 6th ed. Thomson,
Brooks/Cole.

Tutorial 5 Page 4 of 8
 7. A parcel delivery company (ACE Courier Company) knows the average weight of
all parcels delivered by other companies is 7.5 kg. The ACE Courier Company
deals with an accounting firm and believes the firm sends parcels whose weight is
different from that of other companies.

a) Define the null and alternative hypotheses

Solution: Ho: µ = 7.5
H1: µ ≠ 7.5

b) Draw a diagram that illustrates the rejection region for a 5% significance

level. Show the critical value(s).

.025 .025
H0
Ha Ha

Zc =- 1.96 Zc = 1.96

Solution: RR: Z > Zc or Z < - Zc where Zc = ± 1.96

c) If the test statistic is calculated to be Z (calculated) = 1.81 and α = 0.05,

what conclusion can be drawn?
Solution: Do not reject Ho. There is not enough evidence to show the
accounting firm sends parcels whose weight is different from 7.5 kg.

8. A silversmith produces 6 kg boxes of silver cutlery and believes there is a thief in

the organisation. It is believed the standard deviation of all boxes of silver cutlery
is 0.5 kg.

a) Test the silversmith’s belief at the 1% level of significance if a sample of

100 boxes is weighed and the average weight turns out to be 5.9 kg.
Solution: Z = -2.00. Zc = - 2.33. Do not reject Ho. There is not enough
evidence to show there is a thief in the organisation.
b) Why would a significance level of 1% be more suitable than a level of 5%
(the business default value) in this instance?
Solution. Unwilling to take a 5% risk of a wrongful accusation.

9. The new owners of a shopping centre studied the shopping habits of their
customers. The previous history of the shopping centre assumed that the average
time spent by typical shoppers in the centre was 45 minutes with a standard
deviation of 6 minutes. The new owners improved the centre and wished to see if
the improvement caused shoppers to spend more time in the centre. The owners
sampled 45 shoppers. The average time spent in the centre by the sample of
shoppers was 48 minutes with a standard deviation of 7 minutes. Is there

Tutorial 5 Page 5 of 8
 evidence to suggest the improvement caused shoppers to spend more time in the
centre? Use α = 0.05. Hint: Use σ , the ‘real’ standard deviation in the
formula.
Students before you begin this question write down the values of the parameters,
µ and σ and the values of the statistics x and s.

Solution: Given σ = 6. s = 7. However, s is only an estimate of σ . We will

use σ in the calculation.
Ho: µ = 45
H1: µ > 45
RR: Z > Zc where Zc = Z0.05 = 1.645
x −µ
ZX =
σ
n

= 48 – 45 = 3.36
6/√45
Reject Ho. There is sufficient evidence to show that shoppers spend
more time at the shopping centre since upgrading.

10. Workers in a factory are entitled to two 15-minute coffee breaks per working day.
The supervisor of the factory believes that workers are not adhering to the time
constraint. A random sample of the duration of coffee breaks for 10 workers was
taken with the coffee-break times listed below:

12 16 14 18 21 21 20 15 18 16

Assuming that the standard deviation of all times is 2 minutes, is there enough
evidence at the 5% significance level to indicate that the supervisor is correct?

Solution: Test statistic (Z calculated) = 3.318 with Z critical = 1.645.

Reject Ho. There is sufficient evidence to show workers take coffee
breaks that are longer than 15 minutes.

11. A retired couple wish to buy a newspaper business. The vendor informed the
couple that he sells at least 21,000 papers per day with a standard deviation of
5,000 papers. The couple took a random sample of 8 days and determined the
average number of papers sold to be 20,560 copies. Test the vendor’s claim at the
5% level of significance.

Solution: Ho: µ = 21000

H1: µ < 21000
RR: Z < - Zc where Zc = - Z0.05 = - 1.645

Tutorial 5 Page 6 of 8
 x −µ
ZX =
σ
n

= 20560 - 21000 = - 0.249

5000/√8
Do not reject Ho. There is insufficient evidence to show that
less than 21,000 papers are sold per day. Therefore there is enough
evidence to support the vendor’s claim.

12. A politician claims that the mean income of all working mothers has increased.
A survey of 20 working mothers reveals an average of $400 per week. In a
previous census, this population showed a mean income of $380 and a standard
deviation of $50. Test the claim at the 1% level of significance.

Solution: Test statistic ( Z calculated) = 1.789 with Z critical = 2.33. Do

not reject Ho. There is not enough evidence to show the mean income of
all working mothers has increased.

13. A quality inspector believes that the actual mean weight of ‘200 gram blocks
of chocolate’ differs substantially from what is stated on the label. She finds that
a sample of 25 blocks has an average weight of 195 grams. The standard
deviation of all such blocks is known to be 10 grams. Test her belief at the 5%
level of significance.

Solution: Test statistic (Z calculated) = -2.5 with Z critical = ± 1.96.

Reject Ho. There is sufficient evidence to support the claim that 200
gram blocks of chocolate differ from what is stated on the label.

Tutorial 5 Page 7 of 8
Tutorial 5 Page 8 of 8