Question: Opening a restaurant. You are thinking about opening a restaurant and are searching for a good location. From research you have done, you know that the mean income of those living near the restaurant must be over $85,000 to support the type of upscale restaurant you wish to open. You decide to take a simple random sample of 50 people living near one potential location. Based on the mean income of this sample, you will decide whether to open a restaurant there.
(a) State appropriate null and alternative hypotheses. Be sure to define your parameter.
(b) Describe a Type I and a Type II error, and explain the consequences of each.