Chapter 9

Fundamentals of Hypothesis Testing:

One-Sample Tests

9.69 In hypothesis testing, the common level of significance is a = 0.05. Some might argue for a level of significance greater
than 0.05. Suppose that web designers tested the proportion of potential web page visitors with a preference for a new web
design over the existing web design. The null hypothesis was that the population proportion of web page visitors preferring the
new design was 0.50, and the alternative hypothesis was that it was not equal to 0.50. The p-value for the test was 0.20.
a. State, in statistical terms, the null and alternative hypotheses for this example.
b. Explain the risks associated with Type I and Type II errors in this case.
c. What would be the consequences if you rejected the null hypothesis for a p-value of 0.20?
d. What might be an argument for raising the value of a?
e. What would you do in this situation?
f. What is your answer in (e) if the p-value equals 0.12? What if it equals 0.06?

9.70 Financial institutions utilize prediction models to predict bankruptcy. One such model is the Altman Z-score model, which
uses multiple corporate income and balance sheet values to measure the financial health of a company. If the model predicts a
low Z-score value, the firm is in financial stress and is predicted to go bankrupt within the next two years. If the model predicts a
moderate or high Z-score value, the firm is financially healthy and is predicted to be a nonbankrupt firm. This decision-making
procedure can be expressed in the hypothesis-testing framework. The null hypothesis hypothesis is that the firm is predicted to
be a bankrupt firm.
a. Explain the risks associated with committing a Type I error in this case.
b. Explain the risks associated with committing a Type II error in this case.
c. Which type of error do you think executives want to avoid? Explain.
d. How would changes in the model affect the probabilities of committing Type I and Type II errors?

9.71 IAB conducted a study of 821 U.S. adults to understand the behavioral shift of consumers’ TV viewing experience. The
study found that 460 of U.S. adults own streaming enabled TVs, including smart TVs and video streaming devices.
Source: The Changing TV Experience: 2017, available at bit.ly/2sz4Mal.
The authors of the report imply that the survey proves that more than half of all U.S. adults own streaming enabled TVs,
including smart TVs and video streaming devices.
a. Use the five-step p-value approach to hypothesis testing and a 0.05 level of significance to try to prove that more than half of
all U.S. adults own streaming enabled TVs, including smart TVs and video streaming devices.
b. Based on your result in (a), is the claim implied by the authors valid?
c. Suppose the study found that 428 of U.S. adults own streaming enabled TVs, including smart TVs and video streaming
devices. Repeat parts (a) and (b).
d. Compare the results of (b) and (c).

9.72 The owner of a specialty coffee shop wants to study coffee purchasing habits of customers at her shop. She selects a
random sample of 60 customers during a certain week, with the following results:
• The amount spent was   X = $7.25, S = $1.75.
• Thirty-one customers say they “definitely will” recommend the specialty coffee shop to family and friends.
a. At the 0.05 level of significance, is there evidence that the population mean amount spent was different from $6.50?
b. Determine the p-value in (a).
c. At the 0.05 level of significance, is there evidence that more than 50% of all the customers say they “definitely will”
recommend the specialty coffee shop to family and friends?
d. What is your answer to (a) if the sample mean equals $6.25?
e. What is your answer to (c) if 39 customers say they “definitely will” recommend the specialty coffee shop to family and
friends?

9.73 An auditor for a government agency was assigned the task of evaluating reimbursement for office visits to physicians paid
by Medicare. The audit was conducted on a sample of 75 reimbursements, with the following results:
• In 12 of the office visits, there was an incorrect amount of reimbursement.
• The amount of reimbursement was   X = $93.70, S = $34.55.
a. At the 0.05 level of significance, is there evidence that the population mean reimbursement was less than $100?
b. At the 0.05 level of significance, is there evidence that the proportion of incorrect reimbursements in the population was
greater than 0.10?
c. Discuss the underlying assumptions of the test used in (a).
d. What is your answer to (a) if the sample mean equals $90?
e. What is your answer to (b) if 15 office visits had incorrect reimbursements?

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9.74 The Berg Balance Scale (BBS), named after its developer Katherine Berg, is a popular clinical test of a person's static and
dynamic balance abilities. It is scored on a scale of 0 to 56; the higher the value, the better the score. The cut-off score is 45,
which means that a score less than 45 indicates a greater risk of falling. The file BBS_Older contains data for 20 older patients at
a hospital:
43 40 32 38 32 34 46 33 39 34
48 42 9 49 40 40 35 40 40 39
a. At the 0.05 level of significance, is there evidence that the population mean BBS value is less than 40?
b. What assumption about the population distribution is needed in order to conduct the t test in (a)?
c. Construct a boxplot or a normal probability plot to evaluate the assumption made in (b).
d. Do you think that the assumption needed in order to conduct the t test in (a) is valid? Explain.
e. A physiotherapist meets with one of the researchers who gathered this data and asks what BBS values she can expect in case
of her older patients. The researcher replies “Almost certainly less than 40.” Based on the results of (a) through (c), evaluate
the accuracy of this statement.

9.75 Call centers today play an important role in managing day-to- day business communications with customers. It’s important,
therefore, to monitor a comprehensive set of metrics, which can help businesses understand the overall performance of a call
center. One key metric for measuring overall call center performance is service level which is defined as the percentage of calls
answered by a human agent within a specified number of seconds. The file ServiceLevel contains the following data for time, in
seconds, to answer 50 incoming calls to a financial services call center:
16 14 16 19 6 14 15 5 16 18 17 22 6 18 10
15 12 6 19 16 16 15 13 25 9 17 12 10 5 15
23 11 12 14 24 9 10 13 14 26 19 20 13 24 28
15 21 8 16 12
a. At the 0.05 level of significance, is there evidence that the population mean time to answer calls is less than 20 seconds?
b. What assumption about the population distribution is needed in order to conduct the t test in (a)?
c. Construct a histogram, boxplot, or normal probability plot to evaluate the assumption made in (b).
d. Do you think that the assumption needed in order to conduct the t test in (a) is valid? Explain.

9.76 An important quality characteristic used by the manufacturer of Boston and Vermont asphalt shingles is the amount of
moisture the shingles contain when they are packaged. Customers may feel that they have purchased a product lacking in quality
if they find moisture and wet shingles inside the packaging. In some cases, excessive moisture can cause the granules attached to
the shingles for texture and coloring purposes to fall off the shingles, resulting in appearance problems. To monitor the amount
of moisture present, the company conducts moisture tests. A shingle is weighed and then dried. The shingle is then reweighed,
and, based on the amount of moisture taken out of the product, the pounds of moisture per 100 square feet are calculated. The
company would like to show that the mean moisture content is less than 0.35 pound per 100 square feet. The file Moisture

includes 36 measurements (in pounds per 100 square feet) for Boston shingles and 31 for Vermont shingles.
a. For the Boston shingles, is there evidence at the 0.05 level of significance that the population mean moisture content is less
than 0.35 pound per 100 square feet?
b. Interpret the meaning of the p-value in (a).
c. For the Vermont shingles, is there evidence at the 0.05 level of significance that the population mean moisture content is less
than 0.35 pound per 100 square feet?
d. Interpret the meaning of the p-value in (c).
e. What assumption about the population distribution is needed in order to conduct the t tests in (a) and (c)?
f. Construct histograms, boxplots, or normal probability plots to evaluate the assumption made in (a) and (c).
g. Do you think that the assumption needed in order to conduct the t tests in (a) and (c) is valid? Explain.

9.77 Studies conducted by the manufacturer of Boston and Vermont asphalt shingles have shown product weight to be a major
factor in the customer’s perception of quality. Moreover, the weight represents the amount of raw materials being used and is
therefore very important to the company from a cost standpoint. The last stage of the assembly line packages the shingles before
the packages are placed on wooden pallets. Once a pallet is full (a pallet for most brands holds 16 squares of shingles), it is
weighed, and the measurement is recorded. The file Pallet contains the weight (in pounds) from a sample of 368 pallets of
Boston shingles and 330 pallets of Vermont shingles.
a. For the Boston shingles, is there evidence at the 0.05 level of significance that the population mean weight is different from
3,150 pounds?
b. Interpret the meaning of the p-value in (a).
c. For the Vermont shingles, is there evidence at the 0.05 level of significance that the population mean weight is different from
3,700 pounds?
d. Interpret the meaning of the p-value in (c).
e. In (a) through (d), do you have to be concerned with the normality assumption? Explain.

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 Chapter 10
Two-Sample Tests
10.58 The American Society for Quality (ASQ) conducted a salary survey of all its members. ASQ members work in all areas of
manufacturing and service-related institutions, with a common theme of an interest in quality. Two job titles are black belt and
green belt. (See Section 19.6 for a description of these titles in a Six Sigma quality improvement initiative.) Descriptive statistics
concerning salaries for these two job titles are given in the following table:

a. Using a 0.05 level of significance, is there a difference in the variability of salaries between black belts and green belts?
b. Based on the result of (a), which t test defined in Section 10.1 is appropriate for comparing mean salaries?
c. Using a 0.05 level of significance, is the mean salary of black belts greater than the mean salary of green belts?

10.59 Since its first season in 1950, the FIA Formula One World Championship has become one of the most popular
championships of single-seated auto racing. The file F1Prices2018 contains data about average ticket prices for 21 Grand Prix
races.
Source: Data adapted from https://bit.ly/2KTmkZc.
a. At the 0.05 level of significance, is there a difference in the variance of average ticket prices in Europe and the rest of the
world?
b. Using the results of (a), which t test is appropriate for comparing mean ticket prices in Europe and the rest of the world?
c. At the 0.05 level of significance, conduct the test selected in (b).
d. Write a short summary of your findings.

10.60 Do males and females differ in the amount of time they spend online and the amount of time they spend playing games
while online? A study reported that women spent a mean of 1,254 minutes per week online as compared to 1,344 minutes per
week for men.
Suppose that the sample sizes were 100 each for women and men and that the standard deviation for women was 60 minutes per
week as compared to 70 minutes per week for men.
Source: Data extracted from Ofcom, Adults’ Media Use and Attitudes, Report 2016, bit.ly/2emgWRk.
a. Using a 0.01 level of significance, is there evidence of a difference in the variances of the amount of time spent online
between women and men?
b. To test for a difference in the mean online time of women and men, is it most appropriate to use the pooled-variance t test or
the separate-variance t test? Using a 0.01 level of significance, use the most appropriate test to determine if there is a difference
in the mean amount of time spent online between women and men. The report found that women spent a mean of 294 minutes
per week playing games while online compared to a mean of 360 minutes per week for men. Suppose that the standard deviation
for women was 15 minutes per week compared to 20 minutes per week for men.
c. Using a 0.01 level of significance, is there evidence of a difference in the variances of the amount of time spent playing games
while online per week by women and men?
d. Based on the results of (c), use the most appropriate test to determine, at the 0.01 level of significance, whether there is
evidence of a difference in the mean amount of time spent playing games online per week by women and men.

10.61 The file UP‐FBE contains satisfaction ratings, age, GPA, origin, and gender of 100 students at the business department in a
university in Hungary. Completely analyze the differences between international and national students for the variables
satisfaction with teaching quality, offered scholarships, affordable tuition fee, affordable housing, careers service, graduate
employment, and GPA.

10.62 A computer information systems professor is interested in studying the amount of time it takes students enrolled in the
Introduction to Computers course to write a program in VB.NET. The professor hires you to analyze the following results (in
minutes), stored in VB , from a random sample of nine students:
10 13 9 15 12 13 11 13 12
a. At the 0.05 level of significance, is there evidence that the population mean time is greater than 10 minutes? What will you
tell the professor?
b. Suppose that the professor, when checking her results, realizes that the fourth student needed 51 minutes rather than the
recorded 15 minutes to write the VB.NET program. At the 0.05 level of significance, reanalyze the question posed in (a),
using the revised data. What will you tell the professor now?
c. The professor is perplexed by these paradoxical results and requests an explanation from you regarding the justification for
the difference in your findings in (a) and (b). Discuss.
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10.63 Do social shoppers differ from other online consumers with respect to spending behavior? A study of browser-based
shopping sessions reported that social shoppers, consumers who click away from social networks to retail sites or share an item
on a social network, spent a mean of $126.12 on a retail site in a 30-day period compared to other online shoppers who spent a
mean of $115.55.
Source: Data extracted from “Social shoppers spend 8% more than other online consumers,” bit.ly/1FyyXP5.
Suppose that the study consisted of 500 social shoppers and 500 other online shoppers and the standard deviation of the order
value was $40 for social shoppers and $10 for other online shoppers. Assume a level of significance of 0.05.
a. Is there evidence of a difference in the variances of the order values between social shoppers and other online shoppers?
b. Is there evidence of a difference in the mean order value between social shoppers and other online shoppers?
c. Construct a 95% confidence interval estimate for the difference in mean order value between social shoppers and other online
shoppers.

10.64 The file ElectricConsME contains the electric power consumption data (kWh) of 44 randomly selected four-member
households from Saudi Arabia and the United Arab Emirates. Completely analyze the differences between the amount of the
consumed electric power by the two countries’ families. (Use a = 0.05.)

10.65 A hotel manager looks to enhance the initial impressions that hotel guests have when they check in. Contributing to initial
impressions is the time it takes to deliver a guest’s luggage to the room after check-in. A random sample of 20 deliveries on a
particular day were selected in Wing A of the hotel, and a random sample of 20 deliveries were selected in Wing B. The results
are stored in Luggage . Analyze the data and determine whether there is a difference between the mean delivery times in the two
wings of the hotel. (Use a = 0.05.)

10.66 The owner of a restaurant that serves Continental-style entrées has the business objective of learning more about the
patterns of patron demand during the Friday-to-Sunday weekend time period. She decided to study the demand for dessert
during this time period. In addition to studying whether a dessert was ordered, she will study the gender of the individual and
whether a beef entrée was ordered. Data were collected from 630 customers and organized in the following contingency tables:

a. At the 0.05 level of significance, is there evidence of a difference between males and females in the proportion who order
dessert?
b. At the 0.05 level of significance, is there evidence of a difference in the proportion who order dessert based on whether a beef
entrée has been ordered?

10.67 The manufacturer of Boston and Vermont asphalt shingles knows that product weight is a major factor in the customer’s
perception of quality. Moreover, the weight represents the amount of raw materials being used and is therefore very important to
the company from a cost standpoint. The last stage of the assembly line packages the shingles before they are placed on wooden
pallets. Once a pallet is full (a pallet for most brands holds 16 squares of shingles), it is weighed, and the measurement is
recorded. The file Pallet contains the weight (in pounds) from a sample of 368 pallets of Boston shingles and 330 pallets of

Vermont shingles. Completely analyze the differences in the weights of the Boston and Vermont shingles, using a = 0.05.

10.68 The manufacturer of Boston and Vermont asphalt shingles provides its customers with a 20-year warranty on most
of its products. To determine whether a shingle will last as long as the warranty period, the manufacturer conducts accelerated-
life testing. Accelerated-life testing exposes the shingle to the stresses it would be subject to in a lifetime of normal use in a
laboratory setting via an experiment that takes only a few minutes to conduct. In this test, a shingle is repeatedly scraped with a
brush for a short period of time, and the shingle granules removed by the brushing are weighed (in grams). Shingles that
experience low amounts of granule loss are expected to last longer in normal use than shingles that experience high amounts of
granule loss. In this situation, a shingle should experience no more than 0.8 grams of granule loss if it is expected to last the
length of the warranty period. The file Granule contains a sample of 170 measurements made on the company’s Boston shingles
and 140 measurements made on Vermont shingles. Completely analyze the differences in the granule loss of the Boston and
Vermont shingles, using a = 0.05.

10.69 Market data indicates that smartphone users are very concerned about the battery life of their smartphones. An experiment
is conducted in which the battery life of a newly designed smartphone battery is compared to the battery life of an existing

smartphone battery. The following table summarizes the results of the experiment.

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Completely analyze these data and indicate which battery design you prefer.