MIS770A CH 09 Even Sol PDF

Chapter 9: Fundamentals of hypothesis testing:
One-sample tests
Learning objectives
After studying this chapter you should be able to:
1. identify the basic principles of hypothesis testing
2. use hypothesis testing to test a mean or proportion
3. explain the assumptions of each hypothesis-testing procedure, how to evaluate them
and the consequences if they are seriously violated
4. recognise the pitfalls involved in hypothesis testing
5. identify the ethical issues involved in hypothesis testing
9.2 H1 is used to denote the alternative hypothesis.
9.4 is used to denote the risk or the chance of committing a Type II error.
9.6 is the probability of making a Type I error—that is, the probability of incorrectly
rejecting the null hypothesis when in reality the null hypothesis is true and should
not be rejected.
9.8 The power of a test is the complement, which is of the probability of making a
Type II error.
9.10 It is possible not to reject a false null hypothesis because the mean of a single
sample can fall in the non-rejection region even though the hypothesised population
mean is false.
9.14 Under the French judicial system, the null hypothesis assumes the defendant is
guilty, the alternative assumes the defendant is innocent. A Type I error would be
not convicting a guilty person and a Type II error would be convicting an innocent
person.
9.16 10 minutes is adequate travel time between classes.

10 minutes is not adequate travel time between classes.
9.18 The mean amount of paint per can is 4 litres.

The mean amount of paint per can differs from 4 litres.
9.20 Decision rule: Reject H0 if

Decision: Since
9.22 Decision rule: Reject H0 if Z < −2.58 or Z > +2.58.
Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781488617249, Berenson,
Basic Business Statistics 5e
9.24 p-value = 2(1–0.9772) = 0.0456
9.26 p-value =2(0.0838)= 0.1676
9.28 (a)
Decision rule: Reject H0 if .
X −µ 29.3 − 30
Test statistic: Z = = = −1.40
σ/ n 3.5 / 49
Decision: Since is between the critical bounds of do not

reject There is not enough evidence to conclude that the cloth has a mean
breaking strength that differs from 30 kg at the 5% level of significance.
(b) p-value = 2(0.0808) = 0.1616

Interpretation: The probability of getting a sample of 49 pieces that yield a
mean strength that is farther away from the hypothesised population mean
than this sample is 0.1616 or 16.16%.
(c) Decision rule: Reject if

X − µ 29.3 − 30
Test statistic: Z = = = −2.72
σ / n 1.8 / 49
Decision: Since is lower than the critical bound of –1.96, reject
.
There is enough evidence to conclude that the cloth has a mean breaking
strength that differs from 30 kg at the 5% level of significance.
(d) Decision rule: Reject if
X −µ 29 − 30
Test statistic: Z = = = − 4.12
σ/ n 1.7 / 49
Decision: Since is less than the critical bound of –1.96, reject Ho.
There is enough evidence to conclude that the cloth has a mean breaking
strength that differs from 30 kg at the 5% level of significance.
9.30 (a)
Test statistic:
Copyright © 2019 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781488617249, 2
Berenson, Basic Business Statistics 5e
Decision: Since Zcalc = –2.00 is less than the critical bound of –1.96, reject H0.
There is enough evidence to conclude that the amount of soft drink placed in
2-litre bottles at the local bottling plant differs from 2 litres at the 5% level of
significance.
(b) p-value = 2(0.0228) = 0.0456

Interpretation: The probability of getting a sample of 100 bottles that will
yield a mean amount that is farther away from the hypothesised population
mean than this sample is 0.0456.
(c) 1.9802 ≤ µ ≤ 1.9998
(d) The results here are the same. The confidence interval formed does not
include 2.00.
9.32 (a) H 0 : µ = 80
H1 : µ ≠ 80
Decision rule: Reject H0 if Z < −1.96 or Z > +1.96 .

Test statistic:
Decision: Since Z calc = 2.31 is greater than the critical bound of +1.96, reject
H0. There is enough evidence to conclude that the average withdrawal
amount is not $80 at the 5% level of significance.
(b) p-value =2(0.0082) = 0.0208.

Interpretation: The probability of observing a Z test statistic more extreme
than 2.31 is 0.0208 if the population mean is indeed $80. Since this is lower
than the 5% significance level, we reject the null hypothesis.
(c) Using a 0.01 level of significance, we would not reject the null, given that the
p-value is greater than this.
(d) Test statistic:
p-value = 2(0.0026) = 0.0052

Interpretation: The probability of observing a Z test statistic more extreme
than 2.8 is 0.0052 if the population mean is indeed $80. Since this is lower
than the 1% and 5% significance levels, we reject the null hypothesis in both
circumstances.
9.34 Since Zcalc = 2.39 is greater than Zcrit = 2.33, reject H0.
9.36 Since Zcalc = –1.15 is greater than Zcrit = –2.33, do not reject H0.
9.38 Since the p-value = 0.0228 is less than = 0.05, reject H0.
9.40 Since the p-value = 0.0838 is greater than = 0.01, do not reject H0.
9.42 Since the p-value = 0.9162 > 0.01, do not reject the null hypothesis.
9.44 (a)
Test statistic:
Decision: Since is less than the critical bound of reject

Ho. There is enough evidence to conclude the population mean delivery time
has been reduced below the previous value of 25 minutes, at the 5% level of
significance.
(b) Decision rule: If p-value < 0.05, reject H0.

p-value = 0.0047
Decision: Since p-value = 0.0047 is less than reject H0. There is

enough evidence to conclude the population mean delivery time has been
reduced below the previous value of 25 minutes.
(c) The probability of obtaining a sample whose mean is 22.4 minutes or less
when the null hypothesis is true is 0.0047.
(d) The conclusions are the same.
9.46
9.48 (a) For a two-tailed test with a 0.05 level of significance, tcrit =
(b) For an upper-tailed test with a 0.05 level of significance, tcrit =
9.50 No, you should not use the t test to test the null hypothesis that on a
population that is left-skewed because the sample size (n = 16) is less than 30. The
t test assumes that, if the underlying population is not normally distributed, the
sample size is sufficiently large to enable the test statistic t to be influenced by the
Central Limit Theorem. If sample sizes are small (n < 30), the t test should not be
used because the sampling distribution does not meet the requirements of the
Central Limit Theorem.
9.52 (a) H0 : µ ≤ $665

H1 : µ > $665
Decision rule: df = 99. If t > 1.2902, reject H0.

X − µ 675.60 − 665
Test statistic:
= t = = 2.345
S/ n 45.20 / 100
Decision: Since tcalc = 2.345 is greater than the critical bound of +1.2902,
reject H0. There is enough evidence to conclude that the mean cost of
textbooks per semester at a large university is more than $665 at the 1%
significance level.
(b) Decision rule: df = 99. If t >1.6604, reject H0.
X − µ 675.60 − 665
Test statistic:
= t = = 1.413
S/ n 75 / 100
Decision: Since tcalc = 1.413 is less than the critical bound of +1.6604, do not
reject H0. There is not enough evidence to conclude that the mean cost of
significance level.
(c) Decision rule: df = 99. If >1.2902, reject H0.
X − µ 669.60 − 665
Test statistic:
= t = = 1.018
S / n 45.20 / 100
Decision: Since tcalc = 1.018 is less than the critical bound of +1.2902, do not
reject H0. There is insufficient evidence to conclude that the mean cost of
significance level.
9.54
Decision rule: df = 63. If t < –1.6694, reject H0.
Test statistic:
p-value = 0.0992
Decision: Since tcalc = −1.3 is greater than the critical bound of –1.6994, do not
reject H0. There is not enough evidence to conclude that the mean waiting time is
less than 3.7 minutes.
9.56 (a)
Decision rule: df = 26. If t > 2.0555 , reject H0.
(a) Test statistic:
Decision: Since is less than the critical bound of 2.0555, do not
reject H0. There is not enough evidence to conclude that the mean processing
time has changed from 45 days at the 5% significance level.
(b) The population distribution needs to be normal.
(c)
The normal probability plot indicates that the distribution is not normal and is
skewed to the right. The assumption in (b) has been violated.
9.58 (a)
Decision Rule: df = 49. If, t < –1.6766, reject H0. Mean is 40.18, thus, test
statistic:
Thus decision: Since tcalc = –0.46009 is greater than the critical bound of –
1.6766, do not reject H0. There is not enough evidence to conclude that the
mean number of days between receipt of the order and delivery of the sofa is
42 days or less, at the 5% significance level.
(b) The population distribution needs to be normal.
(c)
The normal probability plot indicates that the distribution is skewed to the
right.
(d) Even though the population distribution is probably normally distributed, the
result obtained in (a) should be valid due to the Central Limit Theorem as a
result of the relatively large sample size of 50.
9.60 (a)
Decision rule: df = 99. If | , reject H0.
Test statistic:
Decision: Since , do not reject H0. There is not enough evidence to

conclude that the mean difference is different from 0.0 mm, at the 5%
significance level.
(b) p-value = 0.1781
Interpretation: If the population mean difference is indeed 0.0 mm, the

probability of observing a sample of 100 steel parts that will result in a
sample mean difference further away from the hypothesised value than this
sample is 0.1781.
(c) In order for the t test to be valid, the data are assumed to be independently
drawn from a population that is normally distributed. Since the sample size is
100, which is considered quite large, the t distribution will provide a good
approximation to the sampling distribution of the mean as long as the
population distribution is not very skewed.
(d)
The box-and-whisker plot suggests that the data has a distribution that is
skewed slightly to the right. Given the relatively large sample size of 100
observations, the t distribution should still provide a good approximation to
the sampling distribution of the mean.
9.62
9.64
Decision rule: If Z < –1.96 or Z > 1.96, reject H0.
Test statistic:
Decision: Since Zcalc = 1.00 is between the critical bounds of Z do not reject
H0.
9.66
H 0 : π = 0.306
H1 : π ≠ 0.306
Decision rule: Z < –1.96 or Z > 1.96, reject H0.
p −π (315 / 975) − 0.306

Test statistic: Z = = = − 1.157
π (1 − π ) 0.306(0.694)
n 975
p-value = 0.2460
Decision: Since Zcalc = –1.157 is between the critical bounds of Z = ± 1.96 and the
p-value is greater than 0.05, do not reject H0. There is not sufficient evidence to
show that the proportion of unemployed people looking only for part-time work has
changed.
9.68 (a) H 0 : π ≤ 0.382

H1 : π > 0.382
Decision rule: If Z > 1.645, reject H0.
p −π 0.3991 − 0.382
=Z = = 2.2248
π (1 − π ) 0.382(1 − 0.382)
Test statistic:
n 3,996
Decision: Since Zcalc = 2.2248 is above the critical bound of Z = +1.645,

reject H0. There is enough evidence to show that the proportion of businesses
with a social media presence has increased from 38.2%.
(b) p-value = 0.0130

Decision: Since p-value is smaller than 0.05, reject H0.
9.70
Lower critical value: ZL = –1.6449
(a)
power =
(b)
power =
9.72
(a)
power =
(b)
power =
(c) Holding everything else constant, the larger the sample size, the higher the
power of the test will be and the lower the probability of committing a Type II
error will be.
9.74
(a)
power =
(b)
power =
(c) Holding everything else constant, the greater the distance between the true
mean and the hypothesised mean, the higher the power of the test will be
and the lower the probability of committing a Type II will be. Holding
everything else constant, the smaller the level of significance, the lower the
power of the test will be and the higher the probability of committing a Type
II error will be.
9.76
Critical values: ZL = –1.960, ZU = 1.960
(a) power =
(b) power =
(c) A one-tail test is more powerful than a two-tail test, holding everything else
constant.
9.78 (a) Answers will vary. Avoidance of coverage errors will be necessary.
(b) Participants should be informed of confidentiality arrangements and give
consent to providing information. Reports should disclose the sampling
method and sample size.
9.80 The null hypothesis represents the status quo or the hypothesis that is to be
disproved. The null hypothesis includes an equal sign in its definition of a parameter
of interest. The alternative hypothesis is the opposite of the null hypothesis and
usually represents taking an action. The alternative hypothesis includes either a less
than sign, a not equal to sign or a greater than sign in its definition of a parameter of
interest.
9.82 The power of the test is the probability that the null hypothesis will be rejected when
the null hypothesis is false.
9.84 The p-value is the probability of obtaining a test statistic equal to or more extreme
than the result obtained from the sample.
9.86 The following steps would be used in all hypothesis tests: State the null hypothesis.
State the alternative hypothesis. Choose the level of significance. Choose the sample
size. Determine the appropriate statistical technique and corresponding test statistic
to use. Set up the critical values that divide the rejection and non-rejection regions.
Collect the data and compute the sample value of the appropriate test statistic.
Determine whether the test statistic has fallen into the rejection or the non-rejection
region. The computed value of the test statistic is compared with the critical values
for the appropriate sampling distribution to determine whether it falls into the
rejection or non-rejection region. Make the statistical decision. If the test statistic
falls into the non-rejection region, the null hypothesis H0 cannot be rejected. If the
test statistic falls into the rejection region, the null hypothesis is rejected. Express
the statistical decision in terms of a particular situation.
9.88 Among the questions to be raised are: What is the goal of the experiment or
research? Can it be translated into a null and alternative hypothesis? Is the
hypothesis test going to be two-tailed or one-tailed? Can a random sample be drawn
from the underlying population of interest? What kinds of measurements will be
obtained from the sample? Are the sampled outcomes of the random variable going
to be numerical or categorical? At what significance level, or risk of committing a
Type I error, should the hypothesis test be conducted? Is the intended sample size
large enough to achieve the desired power of the test for the level of significance
chosen? What statistical test procedure is to be used on the sampled data and why?
What kind of conclusions and interpretations can be drawn from the results of the
hypothesis test?
9.90 (a) TasmanTrading commits a Type I error when it purchases a site that is not
profitable.
(b) Type II error occurs when TasmanTrading fails to purchase a profitable site.
The cost to the company when a Type II error is committed is the loss on the
amount of profit the site could have generated had the company had decided
to purchase the site.
(c) The executives at TasmanTrading are trying to avoid a Type I error by
adopting a very stringent decision criterion. Only sites that are classified as
capable of generating high profit will be purchased.
(d) If the executives adopt a less-stringent rejection criterion by buying sites that
the econometric model predicts will produce moderate or large profit, the
probability of committing a Type I error will increase. On the other hand, the
less-stringent rejection criterion will lower the probability of committing a
Type II error as now more potentially profitable sites will be purchased.
9.92 (a)
Decision rule: df = 59. If t < –2.0010 or t > 2.0010, reject H0.
Test statistic:
Decision: Since tcalc = 3.1778 is greater than the upper critical value of t =
2.0010, reject H0. There is enough evidence to conclude that the mean petrol
purchase differs from 38 litres.
(b) p-value = 0.0024
Note: The p-value was found using Excel.
(c)
Decision rule: If Z < –1.645, reject H0.
Test statistic:
Decision: Since Zcalc = –0.32 is greater than the bound of Z = –1.645, do not
reject H0. There is not sufficient evidence to conclude that less than 20% of
the motorists purchase premium unleaded petrol.
(d) Test statistic:
Decision: Since the test statistic tcalc = 0.6620 is between the critical bounds
of do not reject H0. There is not enough evidence to conclude that
the mean petrol purchase differs from 38 litres.
(e) Test statistic:
Decision: Since Zcalc = –1.61 is greater than the critical bound of Z = –1.645,
do not reject H0. There is not sufficient evidence to conclude that less than
20% of the motorists purchase premium unleaded petrol.
9.94 (a)
Decision rule: df = 14. If t < –1.7613, reject H0.
Test statistic:
Decision: Since tcalc = –1.6867 is greater than the critical bound of t = –

1.7613, do not reject H0. There is not enough evidence to conclude that the
mean waiting time at a bank branch in a commercial district of the city is less
than 5 minutes during the 12.00 pm to 1.00 pm lunch period.
(b) To perform the t test on the population mean, you must assume that the
observed sequence in which the data were collected is random and that the
data are approximately normally distributed.
(c) Normal probability plot:
With the exception of one extreme point, the data are approximately normally
distributed.
(d) Based on the results of (a), the manager does not have enough evidence to
make that statement.
9.96 (a)
Decision rule: df = 169. If |t| > 1.9741, reject H0.
Test statistic:
Decision: Since tcalc < –1.9741, reject H0. There is enough evidence to
conclude that the mean particle loss is different from 0.5 grams.
(b) p-value is virtually zero. If the population of observing a sample of 170
shingles that will yield a test statistic more extreme than –21.6059 is virtually
zero.
(c)
Decision rule: df = 139. If |t| > 1.977, reject H0.
Test statistic:
Decision: Since tcalc < –1.977, reject H0. There is enough evidence to conclude
that the mean particle loss is different from 0.5 grams.
(d) p-value is virtually zero. The probability of observing a sample of 140
shingles that will yield a test statistic more extreme than –27.1940 is virtually
zero if the population mean particle loss is in fact 0.5 grams.
(e) In order for the t test to be valid, the data are assumed to be independently
drawn from a population that is normally distributed. Since the sample sizes
are 170 and 140, respectively, which are considered large enough, the t
distribution will provide a good approximation to the sampling distribution of
the mean even if the population is not normally distributed.

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Chapter 9: Fundamentals of hypothesis testing:

9.2 H1 is used to denote the alternative hypothesis.

9.16 10 minutes is adequate travel time between classes.

9.18 The mean amount of paint per can is 4 litres.

9.20 Decision rule: Reject H0 if

9.22 Decision rule: Reject H0 if Z < −2.58 or Z > +2.58.

9.26 p-value =2(0.0838)= 0.1676

Decision rule: Reject H0 if .

Decision: Since is between the critical bounds of do not

(b) p-value = 2(0.0808) = 0.1616

(c) Decision rule: Reject if

(d) Decision rule: Reject if

Decision rule: Reject H0 if .

(b) p-value = 2(0.0228) = 0.0456

(c) 1.9802 ≤ µ ≤ 1.9998

Decision rule: Reject H0 if Z < −1.96 or Z > +1.96 .

(b) p-value =2(0.0082) = 0.0208.

(d) Test statistic:

p-value = 2(0.0026) = 0.0052

Decision rule: Reject H0 if .

Decision: Since is less than the critical bound of reject

(b) Decision rule: If p-value < 0.05, reject H0.

Decision: Since p-value = 0.0047 is less than reject H0. There is

9.52 (a) H0 : µ ≤ $665

Decision rule: df = 99. If t > 1.2902, reject H0.

(b) Decision rule: df = 99. If t >1.6604, reject H0.

(c) Decision rule: df = 99. If >1.2902, reject H0.

Decision rule: df = 63. If t < –1.6694, reject H0.

Decision rule: df = 26. If t > 2.0555 , reject H0.

(a) Test statistic:

(b) The population distribution needs to be normal.

(b) The population distribution needs to be normal.

Decision rule: df = 99. If | , reject H0.

Decision: Since , do not reject H0. There is not enough evidence to

(b) p-value = 0.1781

Interpretation: If the population mean difference is indeed 0.0 mm, the

Decision rule: If Z < –1.96 or Z > 1.96, reject H0.

Decision rule: Z < –1.96 or Z > 1.96, reject H0.

p −π (315 / 975) − 0.306

9.68 (a) H 0 : π ≤ 0.382

Decision: Since Zcalc = 2.2248 is above the critical bound of Z = +1.645,

(b) p-value = 0.0130

Lower critical value: ZL = –1.6449

Lower critical value: ZL = –2.3263

Critical values: ZL = –1.960, ZU = 1.960

Decision rule: df = 59. If t < –2.0010 or t > 2.0010, reject H0.

Decision rule: If Z < –1.645, reject H0.

(d) Test statistic:

Decision: Since tcalc = –1.6867 is greater than the critical bound of t = –

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