Question: A country club wants to exam the effects of a new marketing campaign that attempts to get more people within the community to become members. In many communities, when people buy a house in the area, they receive a “Welcome Wagon” gift basket containing coupons to local restaurants. The idea of the marketing campaign is to include a free two month membership to the country club in the gift basket with the hope that once “new” residents try the country club then at least a certain proportion will want to become real members. In a sample of 160 new residents who received the coupon for the two month free membership, there were 40 people who actually took advantage of the free two month membership.

a) One member of the Club’s Executive Council believes that at least 25% of the people who receive the coupons for the free membership will use the coupon. Conduct a hypothesis test to test the club member’s belief (using the 1% level of significance) (15)