Let's change the problem a little bit: suppose the stream we sampled from is downstream of a nuclear power plant. We know that the population mean for unpolluted streams is 35 with a standard deviation of 4. We use the same variance, but since we guess that the trout are going to be smaller in this stream, we use a normal(30,4) prior. And we calculate the population standard deviation for our stream from the observed values. (No value is given for sigma.x).
We want to test the one-sided hypothesis that the trout in this stream are smaller on average than normal trout. The posterior is calculated in the usual way.
We see that P(35 cm) < 0.005. We reject the hypothesis that the trout are "normal" in length. It makes some difference, but not a lot, that we used a prior mean of 30. If we had used 35, we would have
P(35 cm) < 0.01. I'll let Bolstad say it:
The posterior distribution of g ( μ | y1, ..., yn ) summarizes our entire belief about the parameter, after viewing the data.