Question

Rao’s Finance claims that less than 50% of adults in Suva have a will. A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children. If you die without a will, those wishes may not be carried out. To substantiate the claim, a random sample of 1000 adults showed that 450 of them have a will. A. At the 5% significance level, can you conclude that the percentage of people who have a will is less than 50%? B. What is the Type I error in part A? What is the probability of making this error? C. What would your decision be in part A if the probability of making a Type I error were zero? Explain.

Answer 1

A. Check attachment for proportion hypothesis test

B. Type I error is to conclude that less than 50% of adults in Suva have a will when actual probability is less than 0.5

Probability of type I error= significance level= 0.05

C. If type I error is zero, then we would not be able to reject the null hypothesis