Question 8.63

8.63 Significance test for tipping

Refer to the previous two exercises.

  1. Give a null hypothesis for this setting in terms of the parameters. Explain the meaning of the null hypothesis in simple terms.
  2. Give an alternative hypothesis for this setting in terms of the parameters. Explain the meaning of the alternative hypothesis in simple terms. Give a reason for your choice of this particular alternative hypothesis.
  3. Are the conditions satisfied for the use of the significance test based on the Normal distribution? Explain your answer.

8.63

(a) . For male customers, the percent who tip a red-shirted server is the same as the percent who tip a different-colored-shirt server. (b) Answers will vary. . For male customers, the percent who tip a red-shirted server is higher than the percent who tip a different-coloredshirt server. Because the color red was singled out, it is logical that we might expect it to have higher percent of tips. (Note: is also acceptable with a suitable argument.) (c) Yes, we have at least 10 successes and failures in each sample.