{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# hw7ins - MSPE PROGRAM ECON 506 FALL 2011 Instructions for...

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

MSPE PROGRAM ECON 506 FALL 2011 Instructions for Excel Problem in HW7 NOTE : This is a quick review of the basic things that you are supposed to do. Note that NORMSINV and NORMDIST are two functions in Excel. Power function: Assume that θ is the population unknown parameter. Then power function power ( θ ) is defined as: power ( θ ) = Prob. (rejecting null | the true value of θ is θ ) In other words power function gives the probability of rejecting null for different possible values of parameter. Thus to find the power function we should: 1- First find the rejection region and then 2- Find the probability that sample points fall in the rejection region for different possible values of the parameter under consideration. How to find the Rejection Region? For finding the rejection region we use the given significance level, α . Note that in 3 of 4 tests in the HW, the test is one sided and the rejection region lies in the lower tail of the distribution. The one remaining test (test #3) is two sided and rejection region is composed of two regions at the lower and upper tails of the distribution. Let’s now

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 ]}

### Page1 / 2

hw7ins - MSPE PROGRAM ECON 506 FALL 2011 Instructions for...

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

View Full Document
Ask a homework question - tutors are online