A Manufacturer Claims That Less Than 1% of All His

Multiple Choice

A manufacturer claims that less than 1% of all his products do not meet the minimum government standards. A survey of 500 products revealed ten did not meet the standard. If the z-statistic is -2.58 and the level of significance is 0.02, what is your decision?

A) You reject the null hypothesis, and agree that less than 1% fail to meet government standards.
B) You have insufficient evidence to reject the null hypothesis.
C) You reject the alternate hypothesis and agree that less than 1% meet government standards.
D) You should have used the t-test.