Answer
The coin may favor heads.
Work Step by Step
We first find the value of z using a ti-84 calculator. To do this, press "Stat," and then select "1-PropZTest." Then, plug in $p_0=0.5$, $x=7$, and $n=8$. Then, select $\ne p_0$, and press enter. Doing this, we see that $z=2.12$.
Using a table of z-scores, we find:
$P=0.03$
$0.03\lt0.05$, hence we reject the hypothesis, which means that the coin may favor heads.
