Exam 9: Fundamentals of Hypothesis Testing: One-Sample Tests

A manager of the credit department for an oil company would like to determine whether the average monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the average owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test whether the average balance is different from $75 and decided to reject the null hypothesis, what conclusion could you draw?

TABLE 9- 1 Microsoft Excel was used on a set of data involving the number of parasites found on 46 Monarch butterflies captured in Pismo Beach State Park. A biologist wants to know if the mean number of parasites per butterfly is over 20. She will make her decision using a test with a level of significance of 0.10. The following information was extracted from the Microsoft Excel output for the sample of 46 Monarch butterflies: n=46; Arithmetic Mean =28.00; Standard Deviation =25.92; Standard Error =3.82; Null Hypothesis: :\mu\leq20.000;\alpha=0.10;df=45;T Test Statistic =2.09; One-Tailed Test Upper Critical Value =1.3006; p-value =0.021; Decision = Reject. -Referring to Table 9-1, the biologist can conclude that there is sufficient evidence to show that the average number of parasites per Monarch butterfly in Pismo Beach State Park is over 20 with no more than a 1% probability of incorrectly rejecting the true null hypothesis.

You know that the level of significance (?) of a test is 5%, you can tell that the probability of committing a Type II error (?) is

TABLE 9-3 An appliance manufacturer claims to have developed a compact microwave oven that consumes an average of no more than 250 W. From previous studies, it is believed that power consumption for microwave ovens is normally distributed with a standard deviation of 15 W. A consumer group has decided to try to discover if the claim appears true. They take a sample of 20 microwave ovens and find that they consume an average of 257.3 W. -Referring to Table 9-3, the null hypothesis will be rejected at 1% level of significance.

TABLE 9-4 A drug company is considering marketing a new local anesthetic. The effective time of the anesthetic the drug company is currently producing has a normal distribution with an average of 7.4 minutes with a standard deviation of 1.2 minutes. The chemistry of the new anesthetic is such that the effective time should be normal with the same standard deviation, but the mean effective time may be lower. If it is lower, the drug company will market the new anesthetic; otherwise, they will continue to produce the older one. A sample of size 36 results in a sample mean of 7.1. A hypothesis test will be done to help make the decision. -Referring to Table 9-4, the null hypothesis will be rejected with a level of significance of 0.10.

TABLE 9-7 A major home improvement store conducted its biggest brand recognition campaign in the company's history. A series of new television advertisements featuring well-known entertainers and sports figures were launched. A key metric for the success of television advertisements is the proportion of viewers who "like the ads a lot." A study of 1,189 adults who viewed the ads reported that 230 indicated that they "like the ads a lot." The percentage of a typical television advertisement receiving the "like the ads a lot" score is believed to be 22%. Company officials wanted to know if there is evidence that the series of television advertisements are less successful than the typical ad at a 0.01 level of significance. -Referring to Table 9-7, the company officials can conclude that there is sufficient evidence to show that the series of television advertisements are less successful than the typical ad using a level of significance of 0.01.

If an economist wishes to determine whether there is evidence that average family income in a community equals $25,000

TABLE 9-1 Microsoft Excel was used on a set of data involving the number of parasites found on 46 Monarch butterflies captured in Pismo Beach State Park. A biologist wants to know if the mean number of parasites per butterfly is over 20. She will make her decision using a test with a level of significance of 0.10. The following information was extracted from the Microsoft Excel output for the sample of 46 Monarch butterflies: n=46; Arithmetic Mean =28.00; Standard Deviation =25.92; Standard Error =3.82; Null Hypothesis: :\mu\leq20.000;\alpha=0.10;df=45;T Test Statistic =2.09; One-Tailed Test Upper Critical Value =1.3006; p-value =0.021; Decision = Reject. -Referring to Table 9-1, the null hypothesis would be rejected if a 1% probability of committing a Type I error is allowed.

A major videocassette rental chain is considering opening a new store in an area that currently does not have any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area are equipped with videocassette recorders (VCRs). It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have VCRs. The p-value associated with the test statistic in this problem is approximately equal to

TABLE 9-4 A drug company is considering marketing a new local anesthetic. The effective time of the anesthetic the drug company is currently producing has a normal distribution with an average of 7.4 minutes with a standard deviation of 1.2 minutes. The chemistry of the new anesthetic is such that the effective time should be normal with the same standard deviation, but the mean effective time may be lower. If it is lower, the drug company will market the new anesthetic; otherwise, they will continue to produce the older one. A sample of size 36 results in a sample mean of 7.1. A hypothesis test will be done to help make the decision. -Referring to Table 9-4, what is the probability of making a Type II error if the average effective time of the anesthetic is 7.0 using a 0.10 level of significance?

TABLE 9-1 Microsoft Excel was used on a set of data involving the number of parasites found on 46 Monarch butterflies captured in Pismo Beach State Park. A biologist wantsto know if the mean number of parasites per butterfly is over 20 . She will make her decision usinga test witha level of significance of $0.10$ . The following informationwas extracted from the Microsoft Excel outputfor the sample of 46 Monarchbutterflies: n=46; Arithmetic Mean =28.00; Standard Deviation =25.92; Standard Error =3.82; Null Hypothesis: :\mu\leq20.000;\alpha=0.10;df=45;T Test Statistic =2.09; One-Tailed Test Upper Critical Value =1.3006; p-value =0.021; Decision = Reject. -Referring to Table 9-1, the lowest level of significance at which the null hypothesis can be rejected is____ .

TABLE 9-8 One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's web site was 10.1% The web site at the company was redesigned in an attempt to increase its conversion rates. Samples of 200 browsers at the redesigned site were selected. Suppose that 24 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. -Referring to Table 9-8, state the null hypothesis for this study.

The statement of the null hypothesis always contains an equality.

It is not considered an unethical practice to arbitrarily change or discard extreme or unusual values to alter the results of the hypothesis tests.

TABLE 9-8 One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's web site was 10.1% The web site at the company was redesigned in an attempt to increase its conversion rates. Samples of 200 browsers at the redesigned site were selected. Suppose that 24 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. -Referring to Table 9-8, the value of the probability of committing a type II error þ is 0.95.

TABLE 9-8 One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's web site was 10.1% The web site at the company was redesigned in an attempt to increase its conversion rates. Samples of 200 browsers at the redesigned site were selected. Suppose that 24 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. -Referring to Table 9-8, what will be the p-value if these data were used to perform a two-tailed test?

TABLE 9-7 A major home improvement store conducted its biggest brand recognition campaign in the company's history. A series of new television advertisements featuring well-known entertainers and sports figures were launched. A key metric for the success of television advertisements is the proportion of viewers who "like the ads a lot." A study of 1,189 adults who viewed the ads reported that 230 indicated that they "like the ads a lot." The percentage of a typical television advertisement receiving the "like the ads a lot" score is believed to be 22%. Company officials wanted to know if there is evidence that the series of television advertisements are less successful than the typical ad at a 0.01 level of significance. -Referring to Table 9-7, the parameter the company officials is interested in is

TABLE 9-6 The quality control engineer for a furniture manufacturer is interested in the mean amount of force necessary to produce cracks in stressed oak furniture. She performs a two-tailed test of the null hypothesis that the mean for the stressed oak furniture is 650. The calculated value of the Z test statistic is a positive number that leads to a p-value of 0.080 for the test. -Referring to Table 9-6, if the test is performed with a level of significance of 0.05, the null hypothesis would be rejected.

TABLE 9-8 One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's web site was 10.1% The web site at the company was redesigned in an attempt to increase its conversion rates. Samples of 200 browsers at the redesigned site were selected. Suppose that 24 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. -Referring to Table 9-8, state the alternative hypothesis for this study.

TABLE 9-8 One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's web site was 10.1% The web site at the company was redesigned in an attempt to increase its conversion rates. Samples of 200 browsers at the redesigned site were selected. Suppose that 24 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. -Referring to Table 9-8, the largest level of significance at which the null hypothesis will not be rejected is _____ .