Question

The marketing manager for an automobile manufacturer is interested in determining the proportion of new compact-car owners who would have purchased a GPS navigation system if it had been available for an additional cost of $300. The manager believes from previous information that the proportion is 0.30. Suppose that a survey of 200 new compact-car owners is selected and 79 indicate that they would have purchased the GPS navigation system. If you were to conduct a test to determine whether there is evidence that the proportion is different from 0.30, which test would you use

Answer 1

Two-tailed test.

Explanation:

There are two types of tests:

One-tailed tests and two-tailed tests.

When we only test if the mean is less or more than a value, we have a one-tailed test.

When we test if the mean is different from a value, we have a two-tailed test.

If you were to conduct a test to determine whether there is evidence that the proportion is different from 0.30, which test would you use?

Test if it is different, so a two-tailed test.