Posted by Ben on .
Let p1 represent the population proportion of U.S. Senate and Congress (House of Representatives) democrats who are in favor of a new modest tax on "junk food". Let p2 represent the population proportion of U.S. Senate and Congress (House of Representative) republicans who are in favor of a new modest tax on "junk food". A few years ago, out of the 265 democratic senators and congressman 106 of them were in favor of a "junk food" tax. Out of the 285 republican senators and congressman only 57 of them were in favor a "junk food" tax. Based on this data, at α =.01, can we conclude that the proportion of democrats who favor “junk food" tax is more than 5% higher than proportion of republicans who favor such a tax? Indicate which test you are performing; show the hypotheses, the test statistic and the critical values and mention whether onetailed or twotailed.

Statistics 
MathGuru,
You will need to use a binomial proportion twosample ztest using proportions.
Formula:
z = (p1  p2)/√[pq(1/n1 + 1/n2)]
p1 = 106/265
p2 = 57/285
n1 = 265
n2 = 285
p = (p1 + p2)/(n1 + n2)
q = 1  p
Convert all fractions to decimals. Plug those decimal values into the formula and find z. Once you have that value, you will be able to compare to the critical or cutoff value you find in the ztable at .01 level of significance for a onetailed test (hint: you are looking at "greater than" in the alternate hypothesis).
I'll let you take it from here.