Waiters at Finegolds Restaurant and Lounge earn most of thei

Waiters at Finegold\'s Restaurant and Lounge earn most of their income from tips. Each waiter is required to \"tip-out\" a portion of tips to the table bussers and hostesses. The manager has based the \"tip-out\" rate on the assumption that the mean tip is at least 15% of the customer bill. To make sure that this is the correct assumption, he has decided to conduct a test by randomly sampling 60 bills and recording the actual tips.
Calculate the probability of a Type II error if the true mean is 14%. Assume that the population standard deviation is known to be 2% and that a significance level equal to 0.01 will be used to conduct the hypothesis test.

Solution