Chapter 9.3, Problem 86E

To determine

To Explain: that the on the basis of the mean income of this sample, perform a test at the $\alpha =0.05$ significance level of null hypothesis.

Explanation of Solution

Given:

  $\begin{array}{l}{H}_0:\mu =\$85000\\ H_1:\mu >\$85000\\ {\mu }_A=\text{alternative}\text{mean}=\$86000\\ \alpha =\text{significance}\text{level}=0.05\\ Power=0.64=64\%\end{array}$

The power is the probability of rejecting the null hypothesis once the alternative hypothesis is true.

If the true mean income in the population of people who live close to the restaurant is $86000, then there is 64 percent probability that find the convincing proof to help the alternative hypothesis $\mu >\$85000$