320_hw10_ans

320_hw10_ans - Economic Statistics: Homework 10 Tests of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Economic Statistics: Homework 10 Tests of Population Proportion, Tests of Mean Differences, Tests of Population Variance. 1. A hospital is comparing its performance against an industry benchmark that no more than 50 percent of normal births should result in a hospital stay exceeding 2 days. In their sample of 50 normal births, 31 had stays longer than 2 days. At a 0.025 significance level, is the hospital exceeding the benchmark? Hypotheses: 50 . : = H 5 . : 1 H Test Statistic: n p / ) 1 ( - - is distributed as Z Rejection Region: This is a one-tailed test and we have an area of .025 under the right tail; so the cutoff value of Z is 1.96. Conclusion: The p = x/n = 31/50 = 0.62. The value of the test statistic is Z = 697 . 1 071 . 12 . 50 ) 5 . 1 ( 5 . 5 . 62 . = =-- . This means that the Z statistic does not fall in the rejection region, so we cannot reject Ho. We cannot claim the hospital is exceeding the benchmark. 2. An insurance companys procedure in settling a claim under $10000 is to require two estimates before allowing the insured to proceed with the work. The insurance company compares estimates from two contractors (A and B) for the 10 most recent estimates and finds that the mean difference ( d ) is $-240 with a standard deviation of $327. At the 0.05 level of significance is there a difference between the two contractors? between the two contractors?...
View Full Document

Page1 / 3

320_hw10_ans - Economic Statistics: Homework 10 Tests of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online