1. A research study looks to examine spending in grocery stores that play music. The hypothesis is that stores that play music increase average sales. A random sample of 100 transactions from stores that play music yielded a sample mean sales of $175 per transaction. Assume from previous research that the population standard deviation is $28. The test should determine if sales are greater than

$174.3. Let = .05.

1. Describe the Type I error associated with this problem. Will sales increase or decrease with the music playing in the stores?
2. Determine the correct null and alternative hypotheses for a test to determine if music increased average sales above $170 per transaction.

Ho : > 170

Ha : < 170

1. Report and interpret the p-value and test statistic (z-value) from this test. What is the underlying distribution for the sample mean in this case?
2. Let = 0.05. What is the conclusion of your test? Does the evidence suggest that music increases sales on average? Explain.