2. A magazine is considering launching there is evidence that more than 25% of i
ID: 3306509 • Letter: 2
Question
2. A magazine is considering launching there is evidence that more than 25% of its current readers would subscribe tested: an online edtion. The magazine plans to go ahead with the launch online . The following hypotheses are Ho: p 0.25 H: p>0.25 When the test was conducted, the test statistic is found to be z 1.78. Based on the test statistic reported above, what would the probability be to test state hypotheses? a. B.0.9625 C. 0.0750 A. 0.0375 b. Using a significance level of 0.01, what decision would have been made in the test? A, reject Ho. Advise the company to launch the online edition, ocoq sit B. fail to reject Hs Advise the company not to launch the online edition.io C. fail to reject Ho Advise the company to launch the online edition. D. reject Ho. Advise the company not to launch the online edition. c. Based on the decision made in part b, what type of error is possible? A Type I error B. Type Il error Explain the consequence of making the error you selected in part c from the perspective of the magazine company d. e. If the significance level had been 0.10 instead of 0.01, how would your answer to parts b, c, and d have changed? Part b:- Part c Part d:Explanation / Answer
Ans:
a)p-value=P(z>1.78)=1-0.9625=0.0375
Option A is correct
b)Significance level=0.01
As,p-value=0.0375>0.01,we fail to reject null hypothesis.
Option B s correct.
c)Type II error is possible.
(Type II error:When the null hypothesis is false and you fail to reject it, you make a type II error)
d)if the null hypothesis is false i.e. actually p>0.25 and we fail to reject null hypothesis i.e p=0.25,means we are advising not to launch magazine,when actually it should be launched as p>0.25,so it may cause loss to magazine for their decision of not launching magazine.
e)Now,if significance leve is 0.1
As,p-value=0.0375<0.1,,we reject null hypothesis.
b.Option A is correct.
c.Type I error is possible.
When the null hypothesis is true and you reject it, you make a type I error
d.if the null hypothesis is true i.e. actually p=0.25 and we reject null hypothesis in favor of p>0.25,means we are advising launch magazine,when actually it should not be launched as p=0.25,so it may cause loss to magazine for their decision of launching magazine.
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