Question

8. Suppose you are testing H0 : p = 0.4 versus H1 : p < 0.4. From your data, you calculate your test statistic as z = +1.7. (a) Calculate the p-value for this scenario. (b) Using a significance level of 0.06, what decision should you make?

Answer 1

(a) The p-value is 0.9554

(b) We cannot reject the null hypothesis at the significance level of 0.06

Explanation:

We are dealing with a lower-tail alternative
`H_(1): p < 0.4`. Because the test statistic is z = +1.7 which comes from a normal distribution, the p-value is the probability of getting a value as extreme as the already observed.

(a) P(Z < +1.7) = 0.9554

(b) The p-value is very large, and 0.9554 > 0.06, so, we cannot reject the null hypothesis at the significance level of 0.06