Consider the following to answer the question(s) below:
A study was recently performed by the Canada Revenue Agency to determine how much tip income waiters and waitresses would make based on the size of the bill at the table. A random sample of bills and resulting tips was collected. These data and regression results are as follows:

-In testing the null hypothesis that the correlation coefficient, ρ, equals 0, at α = 0.05
A) We reject the null hypothesis and conclude there is strong evidence of an association between total bill and tip.
B) We fail to reject the null hypothesis and conclude there is no evidence of an association between total bill and tip.
C) We reject the null hypothesis.
D) We fail to reject the null hypothesis.
E) We know tip and total bill are not related.

Question

Consider the following to answer the question(s) below:
A study was recently performed by the Canada Revenue Agency to determine how much tip income waiters and waitresses would make based on the size of the bill at the table. A random sample of bills and resulting tips was collected. These data and regression results are as follows:
  
-In testing the null hypothesis that the correlation coefficient, ρ, equals 0, at α = 0.05
A) We reject the null hypothesis and conclude there is strong evidence of an association between total bill and tip. 
B) We fail to reject the null hypothesis and conclude there is no evidence of an association between total bill and tip. 
C) We reject the null hypothesis. 
D) We fail to reject the null hypothesis. 
E) We know tip and total bill are not related.

Quizplus · Accepted Answer

The null hypothesis is that the correlation coefficient, ρ, equals 0. If we reject the null hypothesis, we are saying that there is evidence of a non-zero correlation, or association, between the two variables (total bill and tip). Therefore, choice A is the correct answer.

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