Waiters at Finegold's Restaurant and Lounge Earn Most of Their

Multiple Choice

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.

A) 0.0041
B) 0.1251
C) 0.0606
D) 0.4123