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A survey conducted by the American Automobile
Association

A survey conducted by the American Automobile Association showed that a family of four spends an
average of $215.60 per day while on vacation. Suppose a sample of 64 families of four vacationing
at Niagara Falls resulted in a sample mean of $252.45 per day and a sample standard deviation of
$74.50. We shall use a 0.05 significance level to test the claim that a family of four will spend more
money, on average, when vacationing at Niagara Falls per day than the average amount for a family
of four claimed by the American Automobile Association.
a) Set up the null and alternative hypotheses, and perform the hypothesis test.
b) Based on the confidence interval from part a), does it appear that the population mean amount
spent per day by families visiting Niagara Falls is more than the mean reported by the American
Automobile Association? Explain.
[5] A bakery in my neighborhood produces loaves of bread with 1 pound written on the label.
Weights of randomly selected sampled loaves from todays production were recorded below:
1.02 0.97 0.98 1.04 1.00 1.02 0.98 1.03
1.03 0.99 1.02 1.06 0.95 1.01 0.97 1.02
a) If you are to perform a hypothesis test to test the claim on the label that the mean weight of the
entire loaves of bread production is more than 1 pound, what distribution are you going to apply
and explain why?
b) If an average weight is less than or equal to 1 pound, then customers think that the bakery is
taking advantage of its weight. When customers find out its actual weight, they might certainly
complain about it. Use a 0.05 significance level to test the claim that the mean weight of the entire
loaves of bread production is more than 1 pound.
c) Do you think that the bakery is correct in its label claim?