Waiters at Finegold's Restaurant and Lounge earn most of their income from tips. Each waiter is required to "tip-out" a portion of tips to the table bussers and hostesses. The manager has based the "tip- out" rate on the assumption that the mean tip is at least 15% of the customer bill. To make sure that this is the correct assumption, he has decided to conduct a test by randomly sampling 60 bills and recording the actual tips. Calculate the probability of a Type II error if the true mean is 14%. Assume that the population standard deviation is known to be 2% and that a significance level equal to 0.01 will be used to conduct the hypothesis test.
A) 0.0041
B) 0.1251
C) 0.0606
D) 0.4123

Question

Quizplus · Accepted Answer

The probability of a Type II error (β) is calculated using the power of the test. Given the true mean is 14%, the significance level is 0.01, and the population standard deviation is 2%, the probability of a Type II error is 0.0606.

Waiters at Finegold's Restaurant and Lounge Earn Most of Their