Table 11-5 A Small Island Off the Coast of Cape Cod Contains

question 307

Multiple Choice

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip.
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750 per day and the 4 business owners have agreed to split the costs of the ferry trips equally. How many ferry trips would the owner of Restaurant 1 prefer to have?

• A)0
• B)1
• C)2

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Definitions:

Chi-Squared Test

A statistical test used to determine if a significant relationship exists between two categorical variables by comparing observed and expected frequencies.

Contingency Table

A table used in statistics to summarize the distribution of two categorical variables, showing the frequency at which certain combinations of the variables occur.

Alternative Hypothesis

The hypothesis that there is a significant difference between groups or conditions, as opposed to the null hypothesis.

Contingency Table

A contingency table is a type of table in a matrix format that displays the frequency distribution of the variables.