Chapter 9 Hypothesis Testing

Solutions

1.
a. The alternative hypothesis needs to be the exact opposite of
what is stated in the null hypothesis . Here should not
have the equality sign.

b. The null hypothesis regarding the population mean must

include some form of the equality sign. The alternative hypothesis

should not have the equality sign.

c. The hypothesized value should be the same under the null and
alternative hypotheses; here, 0.40 ≠ 0.42.

d. Hypothesis testing is about a population parameter (for instance,

or p) and not a sample statistic X .

2.
a. Invalid. The population parameter should be used instead of
the sample statistic X .

b. Valid.

c. Valid.

d. Invalid. The null hypothesis regarding the population mean

must include some form of the equality sign.
3.
a. For a given sample, a reduction in the probability of Type I error
increases the probability of Type II error, and vice versa.

b. If I have already decided on the Type I error, a bigger sample size

will only reduce the Type II error.

c. For a given sample, if I make it difficult to reject the null

hypothesis, it will reduce the Type I error and, therefore, increase
the Type II error.

d. For a given sample, if I make it easy to reject the null hypothesis,

it will increase the Type I error

4.
a. Incorrect. It is not correct to conclude ‘accept the null hypothesis’
because while the sample data may not be inconsistent with the
null hypothesis, it does not necessarily prove that the null
hypothesis is true.

b. Correct. The null hypothesis is rejected whenever it is not

supported by the sample data.

c. Incorrect. We cannot establish a claim if the null hypothesis is not

rejected.

d. Correct.

5.
a. H 0 : μ=18 ; H A : μ ≠18

b. H 0 : p ≤ 0.60 ; H A : p>0.60

c. H 0 : μ≥ 7 ; H A : μ<7
6.
a. The consequence of a Type I error is to conclude that the mean
weight is different from 18 ounces, when it is equal to 18 ounces.
Type II error is to fail to reject that the mean weight is 18 ounces,
when the mean weight is not 18 ounces.

b. A Type I error is to conclude that the stock price increases on

more than 60% of the trading days, when it does not. A Type II
error is not to conclude that the stock price increases on more
than 60% of the trading days when it does.

c. A Type I error is to conclude that Americans sleep for less than 7

hours a day, when they actually sleep for at least 7 hours. A Type
II error is not to conclude that Americans sleep for less than 7
hours a day, when they do.

7.
 a. H 0 : p ≤ 0.50 ; H A : p>0.50

b. H 0 : μ≥ 10 ; H A : μ<10

c. H 0 : μ=250 ; H A : μ ≠ 250

8.
a. A Type I error is to conclude that the majority of voters support
the candidate, when they do not. Type II error is not to conclude
that the candidate has the majority when the candidate does.

b. A Type I error is to conclude that the average pizza is less 10

inches, when it is at least 10 inches. Type II error is not to
conclude that the pizza is less than 10 inches when it is.

c. A Type I error is to conclude that the tablet does not contain

250mg of ibuprofen when it does. A Type II error is not to
conclude that the tablet does not contain 250mg of ibuprofen
when it does not equal 250mg.

9. Here the null hypothesis suggests that the person is telling the truth
and the alternative hypothesis suggests that the person is not telling
the truth.

a. Type I error, α =¿ 0.005.

b. Type II error, β=¿ 1 ‒ 0.95 = 0.05.

c. The consequence of a Type I error is to conclude that the

individual is telling a lie, when the person is actually telling the
truth. A Type II error is to conclude that the individual is telling
the truth, when the person is actually lying.

d. If we do not reject the null hypothesis, we do not prove that the

individual is telling the truth.

10. Here the null hypothesis suggests that the person is free of disease
and the alternative hypothesis suggests that the person has the
disease.

a. Type I error, α =0.03

b. Type II error, β=1−0.98=0.02 .

c. The consequence of Type I error is to conclude that the individual

has the disease, when the person does not have it. A Type II error
 is to conclude that the individual does not have the disease
whereas the person does have it.

d. If we do not reject the null hypothesis, we do not prove that the

individual is free of disease.
11.
a. H 0 :The new software does not significantly reduce assembly costs ;
H A :The new software significantly reduces assembly costs .
The manager of the manufacturing firm is more concerned about
Type I error. The consequence of a Type I error is to conclude that
the new software significantly reduces its assembly costs, when
actually it does not.

b. The software company is more concerned about Type II error.

Type II error
is to fail to reject the null hypothesis, when actually the new
software significantly reduces assembly costs.

12.
a. H 0 :The restaurant does not use higher fat content ;
H A :The restaurant uses higher fat content .
The manager of the restaurant is more concerned about Type I
error. The consequence of a Type I error is to conclude that the
restaurant uses higher fat content, when actually the restaurant
does not.

b. The consumer group is more concerned about Type II error. Type

II error
is to fail to reject the null hypothesis, when actually the restaurant
uses higher fat content.

13.
a. With n = 25, The value of the test statistics,
x−μ0 13.4−12.6
z= = =1.25 ;
σ 3.2 p-value
√n √ 25
¿ P ( Z ≥1.25 ) =1−0.8944=0.1056 .

b. We do not reject because the p-value ¿ 0.1056> 0.10=α .

x−μ0 13.4−12.6
z= = =2.5 ;
c. The value of the test statistics, σ 3.2 the p-
√n √ 100
value ¿ P ( Z ≥2.5 )=1−P ( Z >2.5 ) =1−0.9938=0.0062 .

d. We reject because the p-value ¿ 0.0062<0.10=α .

14. With α =0.10 , the critical valueis z 0.10=1.28 .

 With n = 25, the value of the test statistic,
x−μ0 13.4−12.6
z= = =1.25 .
σ 3.2 We do not reject because
√n √ 25
z=1.25<1.28 .
x−μ0 13.4−12.6
z= = =2.5
With n = 100, the σ 3.2 . Here, we reject
√n √ 100
because z=2.5>1.28 .

15.
a. With α =0.01 , the critical value ,−z 0.01=−2.33 .
With α =0.05 , the critical value, −z 0.05=−1.645 .
b. The value of the test statistic,
x−μ0 144−150
z= = =−1.92 .We do not reject because z=−1.92>−2.33 .
σ 28
√n √ 80

c. We reject because z=−1.92<¿−1.645 . ¿

16.
x−μ0 144−150
The value of the test statistic , z= = =−1.92∧¿
σ 28 the p-
√n √ 80
value ¿ P ( Z ≤−1.92 )=0.0274 . If α =0.01 , we do not reject because
the p-value ¿ 0.0274> 0.01=α .If α =0.05 , we reject because the p-
value ¿ 0.0274< 0.05=α .

17.
x−μ0 1,850−1,800
z= = =1.19 , the
a. σ 440 p-value
√n √110
¿ 2 P ( Z ≥ 1.19 )=2(1−0.8830)=2(0.1170)=0.2340. If α =0.10 , we do
not reject because the p-value ¿ 0.2340>0.10=α .
 x−μ0 1,850−1,800
z= = =1.90 , the
b. σ 440 p-value
√n √280
¿ 2 P ( Z ≥ 1.90 )=2(1−0.9713)=2 ( 0.0287 )=0.0574. If α =0.10 , we
reject because the p-value ¿ 0.0574< 0.10=α .

x−μ0 1,650−1,800
z= = =−1.93 , the
c. σ 440 p-value
√n √32
¿ 2 P ( Z ≤−1.93 )=2(0.0268)=0.0536. If α =0.10 , we reject
because the p-value ¿ 0.0536< 0.10=α .

x−μ0 1,700−1,800
z= = =−1.29 ,
d. σ 440 the p-value
√n √ 32
¿ 2 P ( Z ≤−1.29 )=2(0.0985)=0.1970. If α =0.10 ,we do not reject
because the p-value ¿ 0.1970>0.10=α .

x−μ0 −8−(−5)
z= = =−1.50 ; for
18. σ 10 this right-tailed test, the p-value
√n √25
¿ P ( Z ≥−1.50 )=1−0.0668=0.9332; Since α =0.05 , we do not reject
because the p-value ¿ 0.9332>0.05=α .

x−μ0 80−75
z= = =1.67 ;
19. σ 30 for this left-tailed test, the p-value =
√n √100
P ( Z ≤1.67 )=0.9525 .Since α =0.10 , we do not reject because the p-
value ¿ 0.9525>0.10=α .
20. With α =0.01 , z α / 2=z 0.005 =2.576 ; the critical values are −2.576∧2.576 .
x−μ0 −125−(−100)
z= = =−3.57 .
The value of the test statistic, σ 42
√n √ 36
Since z=−3.57 ←2.576 , we reject 0 H .

21.
a. With α =0.05 , z α / 2=z 0.025=1.96 , the critical values are ―1.96 and
1.96.

x−μ0 132−120
z= = =1.84 .
b. The value of the test statistic, σ 46 Since z =
√n √50

1.84 falls between ―1.96 and 1.96, we do not reject .

c. With α =0.10 , z 0.05=1.645 , the critical values are ―1.645 and 1.645.

d. The value of the test statistic,

x−μ0 108−120
z= = =−1.84 . Since−1.84 ←1.645
σ 46 , we reject .

√n √50
22.
a. H 0 : μ=120 ; H A : μ ≠120
x−μ0 114−120
z= = =−1.64
b. The value of the test statistic, σ 22 . The p-
√n √36
value ¿ 2 P ( Z ≤−1.64 )=2(0.0505)=0.101 .

c. Since 0.101> 0.01=α , we do not reject H 0. The average braking

distance is not significantly different from 120 miles.

d. With α =0.01 , z 0.005 =2.576 ; the critical values are −2.576∧2.576 .

Since z = ―1.64 falls between ―2.576 and 2.576,
we do not reject H 0. We reach the same conclusion as in c.

23.
a. H 0 : μ≤ 130 ; H A : μ>130
 x−μ0 135.25−130
z= = =2.50 .
b. The value of the test statistic, σ 10.50 The
√n √25
p-value ¿ P ( Z ≥2.50 )=1−0.9938=0.0062.

c. Since the p-value ¿ 0.0062<0.05=α , we reject H 0. Customers at this

store spend more than $130.

d. With α =0.05 , the critical value, z α =z 0.05=1.645 .

Since z=2.50> 1.645 , we reject H 0 . We reach the same conclusion
as in part c.

24.
a. H 0 : μ≤ 90 ; H A : μ> 90

x−μ0 95−90
z= = =1.58 .
b. The value of the test statistic, σ 20 The p-
√n √ 40
value ¿ P ( Z ≥1.58 ) =P ( Z ≤−1.58 )=0.0571 .

c. Since the p-value ¿ 0.0571>0.01=α , we do not reject H 0 . The

manager’s claim is not supported by the sample data.

d. With α =0.01 , the critical value , z 0.01=2.33.

Since z=1.58< 2.33 , we do not reject H 0 . We reach the same
conclusion as in c.

25.
a. H 0 : μ≥ 7 ; H A : μ<7
x−μ0 6.7−7
z= = =−1.75 .
The value of the test statistic, σ 2.1 The p-
√n √ 150
value = P ( Z ≤−1.75 )=0.0401. Since the p-value
¿ 0.0401>0.01=α , we do not reject H 0 . The researcher’s claim is not
supported by the sample data.

b.
With α =0.01 , the critical value ,−z 0.01=−2.33 . Since z=−1.75>−2.33 , we do not reject H 0 .
We reach the same conclusion as in a.

26.
a. H 0 : μ=16 ; H A : μ ≠ 16
 x−μ0 15.80−16
z= = =−1.73
b. The value of the test statistic, σ 0.8 .
√n √ 48
With α =0.05 , z α / 2=z 0.025=1.96 ; the critical values are−1.96∧1.96 . Since
z=1.73 falls between−1.96∧1.96 , we do not reject H 0 .

c. Based on the sample data, the average content of bottles is not

significantly different from 16 ounces at the 5% significance level.
Thus, the accuracy of the bottling process is not compromised.

27.
a. H 0 : μ≤ 500,000 ; H A : μ>500,000

b. Excel Command :'=Z .TEST ( A 2: A 37,550,100 ) '=0.1681; the p-

value ¿ P ( Z ≥ z )=0.1681.

c. We do not reject H 0 since the p-value ¿ 0.1681>0.05=α . At the 5%

significance level, we cannot conclude that the average price in
Mission Viejo is more than $500 thousand.

28.
a. H 0 : μ=30 ; H A : μ ≠30

b. With α =0.05 , z α / 2=z 0.025=1.96 ; the critical values are−1.96∧1.96 .

c. For the value of the test statistic, use Excel Command: ‘=(average(B2:B27)-
30)/(stdev.s(B2:B27)/sqrt(26))’ = 2.81.

d. Since 2.81 > 1.96, we reject H 0 . At the 5% significance level, the average
weekly stock price of Home Depot is significantly different from $30.

29.
a. H 0 : μ≥ 22 ; H A : μ<22

b. Excel Command :'=Z .TEST ( A 2: A 51,22,6 ) '=0.9825 ; the p-value

¿ P ( Z ≤ z )=1−0.9825=0.0175.

c. Since the p-value ¿ 0.0175<0.05=α , wereject H 0 . At the 5%

significance level, we conclude that that the average hourly wage
is less than $22.
30.
a. H 0 : μ≤ 27,200 ; H A : μ>27,200

b. With α =0.10 , z 0.10=1.28 ;the critical value is 1.28.

c. For the value of the test statistic, use Excel Command: ‘=(average(A2:A41)-
27200)/(stdev.s(A2:A41)/sqrt(40))’ = −¿1.87.

d. Since –1.87 < 1.28, we do not reject H0. At the 10% significance level, the
average debt of recent undergraduates from Connecticut is not more than
the national average.

31.
a.
x−μ 0 216−210
Given n=40 , df =n−1=39 ,the value of the test statistic , t 39= = =1.46 .
s 26
√n √ 40
The
p-value ¿ P ( T 39 ≥1.46 ) is strictly between 0.05 and 0.10.

x−μ 0 216−210
Given n=80 , df =79 ; t 79 = = =2.06 ;
b. s 26 the p-value
√n √ 80
¿ P ( T 79 ≥2.06 )is strictly between 0.01∧0.025 .
x−μ0 216−210
Given n=40 , df =39; t 39 = = =2.37 ;
c. s 16 the p-value
√n √ 40
¿ P ( T 39 ≥2.37 )is strictly between 0.01∧0.025 .
x−μ0 214−210
Given n=40 , df =39; t 39 = = =1.58;
d. s 16 the p-value
√n √ 40
¿ P ( T 39 ≥1.58 ) is strictly between 0.05∧0.10 .
32.
a. 0.05 < p-value < 0.10. At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .
b. 0.01 < p-value < 0.025. At α =0.01 , we do not reject H 0 since the
p-value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .
c. 0.01 < p-value < 0.025. At α =0.01 , we do not reject H 0 since the
p-value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .
d. 0.05 < p-value < 0.10. At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .

33.
x−μ0 11−12
df =35 ; t 35= = =−1.88 ;
a. s 3.2 p-value ¿ 2 P ( T 35 ≤−1.88 ) ;
√n √36
2 0.025 < p-value < 2 0.05; 0.05 < p-value < 0.10.

x−μ0 13−12
df =35 ; t 35= = =1.88 ;
b. s 3.2 p-value ¿ 2 P ( T 35 ≥ 1.88 ) ;
√n √36
2 0.025 < p-value < 2 0.05; 0.05 < p-value < 0.10.

x−μ0 11−12
df =35 ; t 35= = =−2.14 ;
c. s 2.8 p-value ¿ 2 P ( T 35 ≤−2.14 ) ;
√n √36
2 0.01 < p-value < 2 0.025; 0.02 < p-value < 0.05.

x−μ0 11−12
df =48 ; t 48= = =−2.50 ;
d. s 2.8 p-value ¿ 2 P ( T 48 ≤−2.50 ) ;
√n √ 49
2 0.005 < p-value < 2 0.01; 0.01 < p-value < 0.02.

34.
a. 0.05 < p-value < 0.10; At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .

b. 0.05 < p-value < 0.10; At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .

c. 0.02 < p-value < 0.05; At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .

d. 0.01 < p-value < 0.02; At α =0.01 , we do not reject H 0 since the p-
value ¿ α . At α =0.10 , we reject H 0 since the p-value ¿ α .
35.
a. t α ,df =t 0.01,17 =2.567.

b. t α/ 2 ,df =t 0.005,17 =2.898 ; the critical values are ―2.898 and 2.898.

c. −t α ,df =−t 0.01,17 =−2.567 .

d. t α/ 2 ,df =t 0.005,17 =2.898 ;the critical values are−2.898∧2.898 .

36.
H 0 : μ=16 ; H A : μ ≠ 16

x−μ0 15.2−16
df =31; t 31 = = =−7.54 ;
a. s 0.6 p-value
√n √32
¿ 2 P ( T 31 ≤−7.54 ) <2(0.005)=0.01. Since the
p-value ¿ α =0.01 , we reject H 0 . The sample data suggest that the
population mean is different from 16.

b.
With α =0.01 , t α /2 , df =t 0.005,31 =2.744 ; the critical values are−2.744∧2.744 . Sincet 31=7.54>2.744 , we r
same conclusion as in a.

37.
x−μ0 4.8−4.5
df =23 ; t 23= = =1.84 ;
a. s 0.8 p-value ¿ P ( T 23 ≥1.84 ) ; 0.025
√n √ 24
< p-value < 0.05. Since the p-value ¿ α =0.05 , we reject H 0 .

x−μ0 4.8−4.5
df =23 ; t 23= = =1.84 ;
b. s 0.8 p-value ¿ 2 P ( T 23 ≥ 1.84 ) ; 0.05
√n √ 24
< p-value < 0.10. Since the p-value > α =0.05 , we do not reject H 0 .

38.
a.
df =23 ; t α , df =t 0.05,23=1.714 ; the decision rule is ¿ reject H 0 if t 23 >1.714 .
Since t 23=1.84 ( ¿ previous exercise )>1.714 , we reject H 0 .

b. df =23 ; t α /2 , df =t 0.025,23 =¿
2.069 ; the critical values are ― 2.069∧2.069 ; t
he decision ruleis ¿ reject H 0 if t 23 >2.069∨t 23 <−2.069 . Since t 23=1.84 ( ¿ previous exercise ) falls be
, we do not rejec t H 0 .
39.
x=
58
7 √
=8.29 ; s=
19.4287

x −μ 0 8.29−8
6
=1.80

df =6 ;t 6= = =0.43;
s 1.80 p-value
√n √7
¿ 2 P ( T 6 ≥0.43 ) >2(0.10)=0.20 .Since the
p-value ¿ α =0.05 , we do not reject H 0 .
40.
x=
554
6
=92.33; s=
√
311.33
5
x−μ 0 92.33−100
=7.89 ;

df =5 ; t 5= = =−2.38 .
s 7.89
√n √6
With α =0.01 , the critical value ,−t 0.01,5 =−3.365 ; we reject H 0 if t 5 ←3.365 .
Since−2.38>−3.365 , we do not reject H 0 .

41.
a. H 0 : μ=1.20 ; H A : μ ≠1.20

x−μ0 1.22−1.20
df =35 ; t 35= = =2.00
b. s 0.06 .
√n √36
c. p-value ¿ 2 P ( T 35 ≥ 2.00 ) ; 0.05 < p-value < 0.10. Since the p-value
¿ α =0.05 , we do not reject H 0 . The sample data do not suggest that
the machine is working improperly.

d. t α / 2 ,df =t 0.025,35 =2.030 ; the critical values are ―2.030 and 2.030.
Sincet 35=2.00 falls between−2.030∧2.030 , we do not reject H 0.
Same conclusion as in c.

42.
a. H 0 : μ≤ 5 ; H A : μ>5

x −μ 0 5.53−5
df =6 ; t 6= = =0.64
b. s 2.18 .
√n √7
It is necessary to assume that the population is normally
distributed given that the small sample size of 7 observations is
less than 30.

c.
With α =0.10 , the critical value, t α ,df =t 0.10,6 =1.440 . Since t 6 =0.64<1.440 , we do not reject H 0
. The average waiting time is not significantly more than 5
minutes at the 10% level. There is no need to hire an additional
employee.

d. p-value ¿ P ( T 6 ≥ 0.64 ) > 0.10; since the p-value > α = 0.10, we do

not reject H 0 . Same conclusion as in c.

43.
 a. Given a sample size of only 6 observations, it is necessary to
assume that the price of small computers is normally distributed.

b. H 0 : μ≥ 350 ; H A : μ<350

x−μ 0 344−350
df =5 ; t 5= = =−0.26
c. s 55.90 .
√n √6
d. With α =0.05 , the critical value,−t α , df =−t 0.05,5 =−2.015 .
Since t 5=−0.26>−2.015 , we do not reject H 0 .The sample evidence
does not support the reporter’s claim at the 5% significance level.
There seems to be no cause for concern for larger computer
companies.

44.
a. H 0 : μ=12 ; H A : μ≠ 12

b. It is not necessary to assume that the underlying population is

normally distributed. The sample sizen=48 is larger than 30, so
the sample mean is normally distributed according to Central
Limit Theorem.

c.
With α =0.05 , t α =t 0.025,47 =2.012 ; the critical values are 2.012∧2.012. T he decision ruleis ¿ reject
, df
2
H 0 if t 47> 2.012∨t 47<−2.012.
d.
x−μ0 11.80−12
t 47= = =−1.73 . Since t 47=1.73 falls between−2.012∧2.012 , we do not r eject H 0 .
s 0.8
√n √ 48
The bottling process has not fallen out of adjustment.

45. We will conduct the test with the p-value approach.

H 0 : μ≤ 3 ; H A : μ>3
x−μ0 3.2−3
df =46 ; t 46= = =1.37 ; the
s 1 p-value ¿ P ( T 46 ≥ 1.37 ) ;
√n √ 47
0.05 < p-value < 0.10. Since the p-value ¿ α =0.05 , we do not reject H 0 .
We cannot conclude at the 5% level that the mean forecast of all
NABE members is greater than 3%.

46. We will conduct the test with the p-value approach.

 H 0 : μ≥ 6 ; H A : μ<6
Based on the performance of 12 cars, we use x=5.92 , s=0.09 , and df
x−μ 0 5.92−6
t 11= = =−3.08 ; the
= 11 to compute s 0.09 p-value
√n √ 12
¿ P ( T 11 ≤−3.08 ) ; 0.005 < p-value < 0.01.
Since the p-value ¿ α =0.05 , we reject H 0 .At the 5% level of
significance, we can conclude that the average clock time of all cars is
less than 6 seconds.

47. We will conduct the test with the p-value approach.

H 0 : μ≤ 7 ; H A : μ>7
x−μ 0 9.6−7
df =34−1=33 ; t 33= = =2.92 ;the
s 5.2 p-value ¿ P ( T 33 ≥2.92 ) ;
√n √ 34
0.001 < p-value < 0.005. Since the p-value ¿ α =0.01 , we reject H 0 .
The sample data indicate that the mean drop of all home prices in San
Diego is higher than the 7%.

48. H 0 : μ≤ 4.2; H A : μ> 4.2

x −μ 0 4.38−4.20
df =6 ; t 6= = =2.38
s 0.20
√n √7
a. The p-value ¿ P ( T 6 ≥ 2.38 ) ;0.025 < p-value < 0.05. Since the p-
value ¿ α =0.10 , we reject H 0 . The mean mortgage rate for the
population is higher than 4.2%.

b.
With α =0.10 , the critical value, t α ,df =t 0.10,6 =1.440 . Since t 6 =2.38>1.440 , we reject H 0 .
We reach the same conclusion as in part a.

49.
a. H 0 : μ=14.9 ; H A : μ ≠14.9

b. Given the small sample size n = 7, which is less than 30, it is

necessary to assume that the population from which the sample is
taken is normally distributed.
 x−μ0 15.70−14.9
df =7−1=6 ; t 6= = =0.41
c. s 5.22
√n √7
We use Excel to compute the p-value as
'=T . DIST .2T ( 0.41,6 ) '=0.70.

d. Since the p-value ¿ 0.70>0.10=α , we do not reject H 0 . The P/E ratio

in the footwear industry does not differ from the overall average
of 14.9%, at the 10% level of significance.

50.
a. H 0 : μ=95 ; H A : μ ≠ 95
x−μ0 96.52−95
df =25−1=24 ; t 24= = =0.71
b. s 10.70
√n √25
We use Excel to compute the p-value as
'=T . DIST .2T ( 0.71,24 ) ' =0.48 .

c. Since the p-value ¿ 0.48>0.05=α , we do not reject H 0 . The average

MPG is not significantly different from 95.

51.
a. H 0 : μ≤ 900 ; H A : μ> 900

b. Given the small sample size (n = 26), it is necessary to assume

that the population from which the sample is taken is normally
distributed.

x−μ 0 983.46−900
df =26−1=25 ; t 25= = =3.42
c. s 124.61 .
√n √ 26
We use Excel to compute the p-value as
'=T . DIST . RT (3.42,25 ) ' =0.0011 .

d. Since the p-value ¿ 0.0011<0.05=α , we reject H 0. The average

monthly debt payments are greater than $900 at the 5%
significance level.

52.
a. H 0 : μ≤ 65 ; H A : μ>65
 b. df =40−1=39 ; with α=0.01 ,t α ,df =t 0.01,39=2.462.

x−μ 0 66−65
t 39= = =2.108 .
c. s 3
√n √ 40
d. Since t 39=2.108<2.462 , we do not r eject H 0 . At 1% significant
level, we cannot conclude that the average speed is greater than
the speed limit.

53.
a. H 0 : μ≥ 860.70 ; H A : μ<860.70

b.
df =100−1=99 ; with α=0.10 ,the critical value is−t α ,df =−t 0.10,99 =−1.290 .

We use Excel command: ‘=T.INV(0.10, 99)’.

x −μ 0 841.94−860.70
t 99= = =−0.86 .
c. s 217.15
√n √ 100
d. Since t 99=−0.86 >−1.290 , we do not reject H 0 .At the 10%
significance level, the data does not support the claim that on
average Massachusetts residents spent less than $860.70 on the
lottery in 2010.
54.
22 p−p 0 0.30−0.38
p= =0.30 ;z = = =−1.42;

√ √
a. 74 p 0 ( 1− p0 ) 0.38 (1−0.38 ) the p-value
n 74
¿ P ( Z ≤−1.42 )=0.0778 .

110 p− p 0 0.37−0.38
p= =0.37 ; z= = =−0.36

√ √
b. 300 p 0 ( 1−p 0 ) 0.38 ( 1−0.38 ) ; the p-value
n 300
¿ P ( Z ≤−0.36 )=0.3594 .

p− p0 0.34−0.38
p=0.34 ; z= = =−0.58 ;
c.
√ p0 ( 1− p0 )
n
¿ P ( Z ≤−0.58 ) =0.2810.
√ 0.38 ( 1−0.38 )
50
the p-value

p− p0 0.34−0.38
p=0.34 ; z= = =−1.65 ;
d.
√ p0 ( 1− p0 )
n
¿ P ( Z ≤−1.65 )=0.0495.
√ 0.38 ( 1−0.38 )
400
the p-value

55.
a. When α =0.01 , we do not reject H 0 because the p-value
¿ 0.0708> α ; when α =0.10 , we reject H 0 because the p-value
¿ 0.0708<0.10=α .

b. Since the p-value = 0.3594 is greater than α =0.01 as well as

α =0.10 , we do not reject H 0 ∈both cases.
c. Since the p-value = 0.2810 is greater than α =0.01 as well as
α =0.10 , we do not reject H 0 ∈both cases.
d. When α =0.01 , we do not reject H 0 because the p-value
¿ 0.0495>0.01 ; when α=0.10 , we reject H 0 because the p-value
¿ 0.0495<0.10 .

56.
20 p−p 0 0.30−0.32
p= =0.30; z = = =−0.35 ;

√ √
a. 66 p 0 ( 1−p 0 ) 0.32 ( 1−0.32 ) the p-value
n 66
¿ 2 P ( Z ≤−0.35 )=2 ( 0.3632 )=0.7264 .
 100 p−p 0 0.38−0.32
p= =0.38 ; z= = =2.09 ; t

√ √
b. 264 p 0 ( 1− p0 ) 0.32 ( 1−0.32 ) he p-value
n 264
¿ 2 P ( Z ≥ 2.09 )=2( 0.0183)=0.0366 .

p−p 0 0.40−0.32
p=0.40; z = = =1.08 ;
c.
√ p 0 ( 1−p 0 )
n √
0.32 ( 1−0.32 )

¿ 2 P ( Z ≥ 1.08 )=2( 0.1401)=0.2802.

40
the p-value

p−p 0 0.38−0.32
p=0.38; z = = =1.73 ;
d.
√ p 0 ( 1−p 0 )
n √
0.32 ( 1−0.32 )

¿ 2 P ( Z ≥ 1.73 )=2( 0.0418)=0.0836.

180
the p-value

57.
a. Since the p-value = 0.7642 is greater than α =0.10 ¿
α =0.05 ¿ , we do not reject H 0 ∈bothcases .
b. Since the p-value = 0.0366 is less than α =0.05 ¿
α =0.10 ¿ , we reject H 0 ∈both cases .
c. Since the p-value = 0.4180 is greater than α =0.10 ¿
α =0.05 ¿ , we do not reject H 0 ∈bothcases .
d. When α =0.05 , we do not reject H 0 because the p-value
¿ 0.0836> 0.05; whenα=0.10 , we reject H 0 becausethe p-value
¿ 0.0836< 0.10.

58.
a. With α =0.05 , the critical value, z α =z 0.05=1.645 .

b. With α =0.05 , z α / 2=z 0.025=1.96 . The critical values are−1.96∧1.96 .

c. With α =0.05 , the critical valueis−z α =−z 0.05=−1.645 .

59.
128 p− p0 0.40−0.45
p= =0.40 ; z= = =−1.80 ;

√ √
a. 320 p0 ( 1− p 0 ) 0.45 ( 1−0.45 )
n 320
Since the p-value ¿ P ( Z ≤−1.80 )=0.0359<0.05=α , we reject H 0 .

128 p− p0 0.40−0.45
p= =0.40 ; z= = =−1.80 ;

√ √
b. 320 p0 ( 1− p 0 ) 0.45 ( 1−0.45 )
n 320
 Since the p-value
¿ 2 P ( Z ≤−1.80 )=2(0.0359)=0.0718>0.05=α , we do not reject H 0 .

60.
a.
128 p− p0 0.40−0.45
p= =0.40 ; z= = =−1.80 . With α =0.01 ,

√ √
320 p0 ( 1− p 0 ) 0.45 ( 1−0.45 )
n 320
−z α =−z 0.01 ≈−2.33 ;the decision rule is¿ reject H 0 if z<−2.33 .
Since z=−1.80>−2.33 , we do not reject H 0 .
128 p− p0 0.40−0.45
p= =0.40 ; z= = =−1.80 .

√ √
b. 320 p ( 1− p ) 0.45 ( 1−0.45 )
0 0

n 320
With α =0.01 , z α/ 2=z 0.005 =2.576 ; the critical values are
−2.576∧2.576 . The decision rule is
¿ reject H 0 if z <−2.576∨z >2.576 .
Since z=1.80 fallsbetween−2.576∧2.576 , we do not rejec t H 0 .

61.
H 0 : p=0.70 ; H A : p ≠ 0.70
62 p− p 0 0.775−0.70
p= =0.775; z= = =1.46 ;

√ √
80 p 0 ( 1−p 0 ) 0.70 ( 1−0.70 ) the
n 80
p-value ¿ 2 P ( Z ≥ 1.46 )=2 ( 1−0.9279 )=2 ( 0.0721 )=0.1442 .Since the
p-value ¿ α =0.01, we do not reject H 0 . At the 1% significance level,
the population proportion is not different from 0.70.

62.
H 0 : p ≤ 0.50 ; H A : p>0.50
13 p− p 0 0.65−0.50
p= =0.65 ; z= = =1.34 ;

√ √
20 p0 ( 1− p 0 ) 0.50 ( 1−0.50 )
n 20
The p-value
¿ P ( Z ≥1.34 )=1−0.9099=0.0901 . Since 0.0901>0.05=α , we do not reject H 0 .
At the 5% significance level, we cannot conclude that more than
50% of the observations in a population are below 10.

63.
a. H 0 : p ≥ 0.82 ; H A : p <0.82
 150 p− p0 0.75−0.82
p= =0.75 ; z= = =−2.58 ;

√ √
b. 200 p0 ( 1− p 0 ) 0.82 ( 1−0.82 ) the
n 200
p-value ¿ P ( Z ≤−2.58 ) =0.0049 .

c. Since the p-value ¿ 0.0049<0.05=α , we reject the H 0. The law is

effective at reducing the proportion of teens who talk on their cell
phones while driving at the 5% significance level.

d. With α =0.05 , the critical value, −z 0.05=−1.645 .

Since z=−2.58<−1.645 , we reject H 0 . We reach the same
conclusion as in part c.

64.
a. H 0 : p ≤ 0.20 ; H A : p>0.20

50 p− p0 0.263−0.20
p= =0.263 ; z= = =2.17 ;

√ √
b. 190 p0 ( 1− p 0) 0.20 ( 1−0.20 )
n 190
The p-value ¿ P ( Z ≥2.17 )=P( Z ≤−2.17)=0.015 .

c. Since the p-value ¿ 0.015<0.05=α , we reject H 0.At the 5%

significance level, the economist’s concern is supported by the
sample data.

65.
H 0 : p ≤ 0.50 ; H A : p>0.50
The bartender uses correct proportions only in 10 out of 30, so the
incorrect proportions are used in 20 out of 30.
20 p− p 0 0.667−0.50
p= =0.667 ; z= = =1.83;

√ √
30 p 0 ( 1−p 0 ) 0.50 ( 1−0.50 ) With α =0.05 ,
n 30
the critical value,
z 0.05=1.645 ; the decision rule is¿ reject H 0 if z >1.645 . Since z=1.83>1.645 , we reject H 0 .
The manager’s suspicion is supported by the sample data; at the 5%
significance level, the bartender does not use the correct proportions
in more than 50% of margaritas.

66.
a. H 0 : p ≤ 0.30 ; H A : p>0.30
 68 p−p 0 0.34−0.30
p= =0.34 ; z= = =1.23 .

√ √
200 p 0 ( 1− p0 ) 0.30 (1−0.30 )
n 200
The p-value = P ( Z ≥1.23 ) =1−0.8907=0.1093 . Since the p-value
= 0.1093 > 0.05 = α ,we do not reject H 0 .
b. Since the p-value ¿ 0.1093>0.10=α , we do not reject H 0.

c. Based on the sample data, we do not reject H 0 at both the 5% and

10% significance levels. The production company’s expectation of
more than 30% of viewers returning to the theaters for the same
movie is not supported by the sample data.

67.
a. H 0 : p ≥ 0.70 ; H A : p<0.70

75 p− p0 0.625−0.70
p= =0.625 ; z= = =−1.79 .

√ √
120 p0 ( 1− p 0) 0.70 ( 1−0.70 )
n 120
The p-value ¿ P ( Z ≤−1.79 )=0.0367 . Since the p-value = 0.0367
¿ 0.05=α , we reject H 0. The sample data indicate that older Asian
workers feel less fulfilled than their British counterparts.

b. H 0 : p ≤ 0.50 ; H A : p>0.50

p− p0 0.58−0.50
z= = =2.32 .

√ p0 ( 1− p0 )
n √
0.50 ( 1−0.50 )
210
The p-value ¿ P ( Z ≥2.32 ) =1−0.9898=0.0102. Since the p-value =
0.0102 ¿ 0.05=α , we reject H 0. The data shows that younger
workers in Asia feel more fulfilled than their British counterparts.

68.
H 0 : p ≤ 0.50 ; H A : p>0.50

24 p− p0 0.60−0.50
p= =0.60 ; z= = =1.26 .

√ √
40 p 0 ( 1− p0 ) 0.50 ( 1−0.50 )
n 40
The p-value ¿ P ( Z ≥1.26 )=1−0.8962=0.1038 . Since the p-value =
0.1038 ¿ 0.05=α , we do not reject H 0 . At the 5% significance level, the
politician’s claims are not supported by the data.

69.
H 0 : p ≤ 0.75 ; H A : p>0.75

p− p0 0.78−0.75
z= = =1.01 .

√ p0 ( 1− p0 )
n √
0.75 ( 1−0.75 )
214
The p-value ¿ P ( Z ≥1.01 )=1−P ( Z <1.01 )=1−0.8438=0.1562 . Since
the
p-value = 0.1562 ¿ 0.05=α , we do not reject H 0 . The sample evidence
does not support the claim that more than 75% of financial
institutions that offer online banking facilities are prone to fraud.
 70.
H 0 : p ≤ 0.60 ; H A : p>0.60
90 p− p0 0.64−0.60
p= =0.643 ; z= = =0.97

√ √
140 p0 ( 1− p 0) 0.60 ( 1−0.60 ) .
n 140
The p-value ¿ P ( Z ≥0.97 )=P ( Z ≤−0.97 )=0.1660 .Since the p-value =
0.1660 ¿ 0.01=α , we do not reject H 0. The sample evidence does not
support the claim that more than 60% of seniors have made serious
adjustments to their lifestyle.

71.
a. H 0 : p=0.30 ; H A : p ≠ 0.30

19 p− p0 0.38−0.30
p= =0.38 ; z= = =1.23 ;

√ √
50 p0 ( 1− p 0 ) 0.30 ( 1−0.30 )
n 50
the p-value ¿ 2 P ( Z ≥ 1.23 )=2(1−0.8907)=2 ( 0.1093 )=0.2186 .Since
the
p-value ¿ α =0.05 , we do not reject H 0 . At the 5% significance level,
the proportion of women in Tara’s firm is not different from 0.30.

b. H 0 : p ≤ 0.50 ; H A : p>0.50
32 p−p 0 0.64−0.50
p= =0.64 ;z = = =1.98;

√ √
50 p 0 ( 1− p0 ) 0.50 (1−0.50 )
n 50
the p-value ¿ P ( Z ≥1.98 ) =1−0.9761=0.0239. Since the p-value
¿ α =0.05 , we reject H 0 . At the 5% significance level, the proportion
of whites in Tara’s firm is greater than 0.50.

72. H 0 :The drug does not raise the blood pressure of its users ;
H A :The drug raises the blood pressure of its users .
The manager of the pharmaceutical company is more concerned
about Type I error. The consequence of a Type I error is to conclude
that the drug raises the blood pressure of its users when it actually
does not.

73. H 0 : μ≤ 10 ; H A : μ>10 .

a. The manager of the company is more concerned about Type II

error. The consequence of a Type II error is to conclude that the
diet does not lower the weight by more than 10 pounds when it
actually does.
 b. The consumers should be more concerned about Type I error.
The consequence of a Type I error is to conclude that the diet will
lower the weight by more than10 pounds when it actually does
not.

74.
a. H 0 : μ≤ 10 ; H A : μ>10

b.
With α =0.05 , the critical value, t α ,df =t 0.05,17 =1.740; the decision rule is ¿ reject H 0 if
t 17>1.740 .
x−μ 0 10.8−10
df =17 ; t 17= = =1.41
c. s 2.4 .
√n √ 18
d. Since t 17=1.41<1.740 , we do not reject H 0 .The claim by the weight
loss clinic is not supported by the sample data.

75.
a. H 0 : μ≤ 10 ; H A : μ>10

x−μ 0 10.5−10
df =44 ; t 44 = = =1.86
b. s 1.8 .
√n √ 45
c.
With α =0.05 , the critical value, t α ,df =t 0.05,44 =1.680 . Since t 44 =1.86>1.680 , we reject H 0 .
The sample evidence supports the manufacturer’s claim that the
battery life is more than 10 hours.

d. The p-value ¿ P ( T 44 ≥ 1.86 ) ; 0.025 < p-value < 0.05. Since the p-
value
¿ α =0.05 , we reject H 0 . We reach the same conclusion as in c.
76.
H 0 : μ≤ 20 ; H A : μ>20

x−μ0 22.08−20
df =31;t 31= = =2.17
s 5.42
√n √32
With α =0.01 , the critical value , t α , df =t 0.01,31=2.453 .
Sincet 31=2.17<2.453 , we do not reject H 0 . At the 1% significance level,
we cannot conclude that drivers’ waiting time exceeds 20 minutes.
Thus, there is no need for the city council to spend additional money
to reduce the amount of traffic.

77.
a. H 0 : μ=4.37 ; H A :μ ≠ 4.37

b.
With α =0.05 , t α / 2, df =t 0.025,6=2.447 ; thecritical values are−2.447∧2.447 ; the decision rule is ¿ reject H

c. x=
31.25
7
=4.46 ; s=
0.4287
6
x −μ 0 4.46−4.37
√
=0.27

df =6 ; t 6= = =0.88
s 0.27 .
√n √7
d. Sincet 6=0.88 falls between−2.447∧2.447 , we do not reject H 0 .At the
5% significance level, we cannot conclude that there is a change
in the mortgage rate from the previous week.

78.
H 0 : p ≥ 0.35 ; H A : p<0.35

Case 1 :n=1000
p− p 0 0.33−0.35
p=0.33; z = = =−1.33

√ √
p 0 ( 1−p 0 )
0.35 ( 1−0.35 ) .
n 1000
The p-value ¿ P ( Z ≤−1.33 )=0.0918.
Since the p-value ¿ 0.0918>0.05=α , we do not reject H 0 . At the 5%
significance level, the sample evidence suggests that the percentage
of Americans who feel that the country is headed in the right
direction is not below 35%.

Case 2 :n=2000
 p− p 0 0.33−0.35
p=0.33; z = = =−1.88

√ √
p 0 ( 1−p 0 )
0.35 ( 1−0.35 ) .
n 2000
The p-value ¿ P ( Z ≤−1.88 )=0.0301.
Since the p-value ¿ 0.0301<0.05=α , we reject H 0 . At the 5%
significance level, the sample evidence suggests that the percentage
of Americans who feel that the country is headed in the right
direction is below 35%.

79.
a. H 0 : p ≥ 0.90 ; H A : p<0.90

1068 p− p0 0.89−0.90
p= =0.89 ; z= = =−1.15

√ √
b. 1200 p0 ( 1− p 0) 0.90 ( 1−0.90 ) .
n 1200

c. The p-value ¿ P ( Z ≤−1.15 )=0.1251.

d. Since the p-value ¿ 0.1251>0.05=α , we do not reject H 0 .Based on

the sample evidence, there is no need for the retailer to improve
its services at the 5% significance level.

80.
a. H 0 : p ≤ 0.33 ; H A : p>0.33

p− p 0 0.42−0.33
p=0.42; z= = =1.91
b.
√ p0 ( 1− p 0 )
n √ 0.33 ( 1−0.33 )
100
.

c. With α =0.01 , the critical value , z 0.01=2.33 . T

he decision ruleis ¿ reject H 0 if z >2.33 .

d. Since z=1.91<2.33 , we do not reject H 0 .At the 1% significance level,

the Massachusetts teens do not engage in this behavior at a rate
greater than the national rate.

81.
a. H 0 : p ≤ 0.50 ; H A : p>0.50
 428 p−p 0 0.52−0.50
p= =0.52; z = = =1.15

√ √
b. 827 p 0 ( 1−p 0 ) 0.50 ( 1−0.50 ) .
n 827

c. Withα =0.01 , the critical value , z 0.01=2.33 . T

he decision ruleis ¿ reject H 0 if z >2.33 .

d. Since z=1.15< 2.33 , we do not reject H 0 . At the 1% significance level,

the percentage of individuals who want to watch the new show is
not more than 50%. As a result, the television network should
keep its current lineup.

82.
a. H 0 : p=0.23 ; H A : p ≠ 0.23

51 p− p 0 0.26−0.23
p= =0.26 ; z= = =1.01

√ √
b. 200 p 0 ( 1−p 0 ) 0.23 ( 1−0.23 ) .
n 200
The p-value ¿ 2 P ( Z ≥ 1.01 )=2(1−0.8438)=2(0.1562)=0.3124 .

c. Since the p-value ¿ 0.3124> 0.05=α , we do not reject H 0 .At the 5%

significance level, the sample data does support Pew Research
2010 findings. In other words, the percentage of Americans who
only use cell phones does not differ from 23%.
83.
a. H 0 : μ≤ 12 ; H A :μ >12

b. We use Excel to find the p-value as

'=Z . TEST ( B2 : B 26,12,30)' =0.2966.

c. Since the p-value ¿ 0.7879>0.05=α , we do not reject H 0 .At the 5%

significance level, the sample evidence does not support that the
mean return is greater than 12%.

84.
a. H 0 : μ=13,500 ; H A : μ ≠13,500

x−μ0 14,562−13,500
df =49 ; t 49= = =2.59
b. s 2,895.66 . We use Excel to find
√n √ 50
the p-value
as '=T . DIST .2T ( 2.59,49 ) ' =0.013 .

c. Since the p-value ¿ 2 P ( T 49 ≥2.59 ) = 0.013<0.10=α ,we reject H 0 .

The average number of miles driven annually by Midwesterners
is different from the U.S. average at the 10% significance level.

85.
a. H 0 : μ=130 ; H A : μ ≠130

x−μ0 128.25−130
df =39 ; t 39= = =−0.358
b. s 30.88 . We use Excel to find
√n √ 40
the p-value
as '=T . DIST .2T (|−0.358| ,39 ) ' =0.7222 .

c. Since the p-value ¿ 2 P ( T 39 ≥ 0.358 ) = 0.7222>0.05=α , we do not

reject H 0 . Monthly sales do not differ from $130 thousand at the
5% significance level.

86.
a. H 0 : μ≤ 4000; H A : μ> 4000

b. With α =0.05 , the critical value, t α ,df =t 0.05,29 =1.699; Excel command:
’= T.INV(0.95, 29)’.
 x−μ0 3959.53−4,000
df =29 ; t 29= = =−0.55
c. s 406.55 .
√n √ 30
d. Since t 29=−0.55<1.699 , we do not reject H 0 . At the 5% significance
level, we cannot conclude that the average trading volume on the
Dow Jones Industrial Average (DJIA) has increased since the
beginning of the year.

87.
a. H 0 : p ≥ 0.20 ; H A : p<0.20
8 p− p 0 0.16−0.20
p= =0.16 ; z= = =−0.71

√ √
50 p 0 ( 1−p 0 ) 0.20 ( 1−0.20 ) .
n 50
With α =0.05 , the critical value,−z 0.05=−1.645. Since z=−0.71>−1.645 ,
we do not reject H 0 .At the 5% significance level, the proportion of
business majors who study hard is not less than 20%.

b. H 0 : p ≤ 0.20 ; H A : p>0.20
17 p− p0 0.34−0.20
p= =0.34 ; z= = =2.47

√ √
50 p 0 ( 1− p0 ) 0.20 ( 1−0.20 ) .
n 50
With α =0.05 , the critical value, z 0.05=1.645 .
Since z=2.47>1.645 , we reject H 0 .At the 5% significance level, the
proportion of nonbusiness majors who study hard is more than
20%.

Case Study 9.1

1. Low Income (Family Income=$40,000)

H 0 : μ≥ $ 6,500 ; H A :μ <$ 6,500

x −μ 0 5,502.60−6,500
df =9 ; t 9= = =−1.67
s 1,889.07
√n √10
With α =0.05 , the critical value,−t α , df =−t 0.05,9 =−1.833 .
Sincet 9=−1.67 >−1.833 , we do not reject H 0 . At the 5% significance
level, the sample evidence does not support the spokesman’s claim
that families with an income of $40,000 spend less than $6,500 to
send their children to an elite college.
2. Medium Income (Family Income=$80,000)

H 0 : μ≥ $ 20,000 ; H A :μ <$ 20,000

x −μ 0 16,329.90−20,000
df =9 ; t 9= = =−1.80
s 6,442.16 .
√n √ 10
With α =0.05 , the critical value,−t α , df =−t 0.05,9 =−1.833 .
Sincet 9=−1.80>−1.833 , we do not reject H 0 . At the 5% significance
level, the sample evidence does not support the spokesman’s claim
that families with an income of $80,000 spend less than $20,000 to
send their children to an elite college.

High Income (Family Income=$120,000)

H 0 : μ≥ $ 35,000 ; H A :μ <$ 35,000

x −μ 0 30,432.50−35,000
df =9 ;t 9= = =−1.30
s 11,086.29 .
√n √ 10
With α =0.05 , the critical value,−t α, df =−t 0.05,9 =−1.833 ; thedecision rule is ¿ reject H 0 if t 9 ←1.833
Sincet 9=−1.30>−1.833 , we do not reject H 0 . At the 5% significance
level, the sample evidence does not support the spokesman’s claim
that families with an income of $120,000 spend less than $35,000
to send their children to an elite college.

3. Overall, the claim by the college spokesperson is not substantiated

by the sample data.

Case Study 9.2

1.

Probability of Performance on Test

Poor
Average (1
Best (3 and and
(5) 4) 2)
p (after) 0.09 0.50
84 0.4016 00
p0(befor
e) 0.08 0.38 0.54
 After the monetary incentive, the percentage of students who
score 5 in the given sample is 10%, which is more than the
historical average of 8%. Similarly, the percentage of students
who score 3 and 4 is 40%, which is higher than the historical
average of 38%. Finally 50% of the students score 1 and 2 in the
sample, which is lower than the historical average of 54%. It
appears that there are differences in performance before and after
the monetary incentive, but are these differences significant?
There is a need to test the relevant hypotheses.

2. SCORE = 5:

H 0 : p ≤ 0.08 ; H A : p>0.08

12 p− p 0 0.0984−0.08
p= =0.0984 ; z= = =0.75

√ √
122 p0 ( 1− p 0 ) 0.08 ( 1−0.08 ) .
n 122
The p-value ¿ P ( Z ≥0.75 )=0.2266 . Since the p-value
¿ 0.2266> 0.05=α , we do not reject H 0 . The percentage of students
scoring 5, after the introduction of the monetary incentive, is not
significantly higher than 8% (the historical average).

3. SCORE = 1 and 2:

H 0 : p ≥ 0.54 ; H A : p< 0.54

61 p− p0 0.50−0.54
p= =0.50 ; z= = =−0.89

√ √
122 p0 ( 1− p0 ) 0.54 ( 1−0.54 )
n 122
The p-value¿ P ( Z ≤−0.89 ) =¿0.1867. Since the p-value
¿ 0.1867> 0.05=α , we do not reject H 0 . The percentage of students
scoring 1 and 2, after the introduction of the monetary incentive, is
not significantly lower than 54% (the historical average).

4. Overall, the monetary incentive did not make any significant

impact in improving students’ performance in Chicago at the 5%
significance level.

Case Study 9.3

1.
H 0 : μ≤ 65.9 ; H A : μ>65.9
 x−μ0 71.43−65.9
df =34 ; t 34= = =1.29
s 25.45 .
√n √35
With α =0.05 , the critical value, t α ,df =t 0.05,34 =1.691.
Sincet 34=1.29<1.691 , we do not reject H 0 .At the 5% significance
level, the well-being score of Hawaiians is not significantly higher
than the national average of 65.9.

2.
H 0 : p ≥ 0.40 ; H A : p<0.40
8 p− p 0 0.2286−0.40
p= =0.2286 ; z= = =−2.07

√ √
35 p 0 ( 1−p 0 ) 0.40 ( 1−0.40 ) . The p-
n 35
value ¿ P ( Z ≤−2.07 ) =0.0192 . Since the p-value = 0.0192 < 0.05 =
α , we reject H 0 . At the 5% significance level, we conclude that the
proportion of Hawaiians who score below 50 is less than 40%.