Solution:-
a) State the hypotheses. The first step is to state the null hypothesis and an alternative hypothesis.
Null hypothesis: < 0.50
Alternative hypothesis: > 0.50
Note that these hypotheses constitute a one-tailed test.
b)
Formulate an analysis plan. For this analysis, the significance level is 0.05. The test method, shown in the next section, is a one-sample z-test.
Analyze sample data. Using sample data, we calculate the standard deviation (S.D) and compute the z-score test statistic (z).
c)
The mean is 0.50.
S.D = sqrt[ P * ( 1 - P ) / n ]
S.D = 0.08704
d)
z = (p - P) / S.D
z = 0.870
where P is the hypothesized value of population proportion in the null hypothesis, p is the sample proportion, and n is the sample size.
Since we have a one-tailed test, the P-value is the probability that the z-score is greater than 0.870.
Thus, the P-value = 0.192.
Interpret results. Since the P-value (0.192) is greater than the significance level (0.05), we have to accept the null hypothesis.
We have little to no evidence that the long run proportion of people who will pick a big number(3 or 4) is greater than 50%.
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