Instant versus fresh-brewed coffee. A matched pairs experiment compares the taste of instant versus fresh-brewed coffee. Each subject tastes two unmarked cups of coffee, one of each type, in random order and states which he or she prefers. Of the 40 subjects who participate in the study, 12 prefer the instant coffee. Let p be the probability that a randomly chosen subject prefers fresh-brewed coffee to instant coffee. (In practical terms, p is the proportion of the population who prefer fresh-brewed coffee.)

(a) Test the claim that a majority of people prefer the taste of fresh-brewed coffee. Report the large-sample z statistic and its P-value.

(b) Draw a sketch of a standard Normal curve and mark the location of your z statistic. Shade the appropriate area that corresponds to the P-value.

(c) Is your result significant at the 5% level? What is your practical conclusion?