Central Airlines claims that the median price of a round-trip ticket from Chicag

Question

Central Airlines claims that the median price of a round-trip ticket from Chicago to Jackson Hole, Wyoming, is $500. This claim is being challenged by the Association of Travel Agents, who believe the median price is less than $500. A random sample of 416 round-trip tickets from Chicago to Jackson Hole revealed 178 tickets were below $500. None of the tickets were exactly $500. Let = 0.05.

What is your decision regarding H0? Interpret. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and the final answer to 2 decimal places.)

Explanation / Answer

b) mean =np=416*0.5=208

std deviation =10.198

therefore test stat z=(X-mean)/std deviation =(178-208)/10.198= 2.94

as test stat is less then -1.65; reject Ho. MEdian is less then 500

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