Question 2: Show all workings where needed (2 marks) (4 marks) a) A research tea

Question

Question 2: Show all workings where needed (2 marks) (4 marks) a) A research team wants to know if aspirin helps to thin blood. The null hypothesis says that it does not. They test 12 patients, observe the proportion with thinner blood, and get a p-value of 0.32. They proclaim that aspirin does not work. What would you say? b) A bank is testing a new method for getting delinquent customers to pay their past due credit card bills. The standard way was to send a letter (costing $0.40 each) asking the customer to pay. That worked 30% of the time. They want to test a new method that involves sending a video tape to the customer encouraging them to contact the bank and set up a payment plan. Developing and sending the video costs about $10.00 per customer. What is the parameter of interest? What are the null and alternate hypotheses? c) The bank sets up an experiment to test the effectiveness of the video tape. They mail it out to several randomly selected delinquent customers and keep track of how many actually do contact the bank to arrange payments. The banks statistician calculates the P-value of 0.003. What does this P-value suggest about the video tape? d) The statistician tells the ban’s management that the results are clear and that they should switch to the video tape method. Do you agree? What else may you also wish to know?

Explanation / Answer

Solution:-

a) They proclaim that aspirin does not work.

Null hypothesis H0: It does not work

Alternate hypothesis HA : It does work.

Since p value (0.32) is more than the significance value (generally 0.05), so we have to accept the null hypothesis.

From this we conclude that we have sufficient evidence in the favor of the claim that Aspirin does not work.

b)

Parameter of interest is percentage of time the video worked i.e it should be more than 30%

Null hypothesis H0: Video worked equal to less than 30% of times.

Alternate hypothesis HA : Video worked more than 30% of times

c)

Since p value(0.003) is less than the significance value (0.05) so we have to reject the null hypothesis.

So from this test we can conclude that we have sufficient evidence in the favor of the claim that video tape method is more effective than sending letter mehod.

d) Yes we agree with the statistician, we would aslo like to know about the significance value beacause in the above test we have supposed the significance value as 0.05.

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