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An airline claims that the no-show rate for passengers is less than 5%. In a sam

ID: 3153389 • Letter: A

Question

An airline claims that the no-show rate for passengers is less than 5%. In a sample of 420 randomly selected reservations, 19 were no-shows. At a = 0.01, test the airline's claim. Round p to the nearest thousandth when calculating the test statistic. f Write the hypotheses to test this airlines' claim. Find the value of the z-test statistic. Find the p-value (probability) of the z-test statistic based on your hypotheses. Draw your conclusion. Make sure to write the conclusion in the context of the problem.

Explanation / Answer

a)

Formulating the null and alternatuve hypotheses,          
          
Ho:   p   >=   0.05
Ha:   p   <   0.05 [ANSWER]

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b)


As we see, the hypothesized po =   0.05      
Getting the point estimate of p, p^,          
          
p^ = x / n =    0.045238095      
          
Getting the standard error of p^, sp,          
          
sp = sqrt[po (1 - po)/n] =    0.010634624      
          
Getting the z statistic,          
          
z = (p^ - po)/sp =    -0.447773663   [ANSWER]

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c)  
          
As this is a    1   tailed test, then, getting the p value,  
          
p =    0.327158276   [ANSWER]

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d)

  
As P > 0.01, we   FAIL TO REJECT THE NULL HYPOTHESIS.  

Hence, there is no significant evidence to suuport the airline's claim that the no-show rate for passengers is less than 5%. [CONCLUSION]  

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