320_hw10_ans

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

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

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 . 0 : 0 = Π H 5 . 0 : 1 Π H Test Statistic: n p / ) 1 ( ˆ Π - Π Π - 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 . 0 12 . 0 50 ) 5 . 0 1 ( 5 . 0 5 . 0 62 . 0 = = - - . 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 company’s 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?

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern