Question

Suppose you are interested in determining if the average amount of money that students spend on food at your university per day is greater than $30. You randomly choose 25 students from your campus and calculate that the mean amount of money spent per day is $18.01 with a standard deviation of $2.22. Would you use a one-sided or two-sided test for this problem?

Answer 1

One-sided test

Explanation:

In this problem, since we are only interested in knowing if the mean is greater than $30, a one sided test should be used to calculate, at the desired significance level, if the z-score for the measured mean is greater than the z-score equivalent to spending $30. A two-sided test should be used if we wanted to determine if the mean amount spent was within an interval, like $20 and $30 for instance.