MODULE 2.

3
OCTOBER 31 – NOVEMBER 7, 2020

Chapter
8 Hypothesis Testing

Learning Objectives
After completing this chapter, the students will able to:
o Understand the terms used is hypothesis testing.
o Differentiate the method of the hypothesis testing traditional method, p-value and
confidence interval.
o State the null (H0) and alternative hypotheses (H1).
o Compare and contrast one-tailed test and two-tailed test.
o Compare and contrast one-tailed test and two-tailed test.
o Find the critical values for the z and t test.
o State the steps used in hypothesis testing.
o Test means for large samples, by means of z test.
o Test means for small samples, by means of z test.
o Test proportions, using the z test.
o Test the hypothesis, using p-value
o Test the hypothesis, using confidence interval.

Chapter Outline
8.1 Introduction
8.2 Procedure in Testing Hypothesis
8.3 Hypothesis Testing using p-value
8.4 Confidence Interval and Hypothesis Testing
8.5 One Sample z Test
8.6 One Sample t Test
8.7 z Test for Proportion

Do not put your faith in what statistics say until you have
carefully considered what they do not say.

…….
203
 -William W. Watt

8.1 Introduction

Hypothesis testing was introduced by Sir Ronald Fisher, Jerzy Newman, Karl Pearson
and Egon Pearson (Karl Pearson’s son). Hypothesis testing is a statistical method that is
used in making statistical decisions using experimental data. Hypothesis testing is
basically an assumption that we make about the population parameter. There are three
methods used to test hypotheses by traditional method, by p-value method, or by
confidence interval method.

The traditional method will be discussed initially which is the most widely used
especially in statistics books and instructional manuals. The p-value method becomes
popular since the advent of modern computer and high -powered statistical software’s.
The confidence interval is explained after the p-value and some illustrative examples
were discussed to show its relationships with hypothesis testing.

8.2 Procedure In Hypothesis Testing

All hypothesis testing situations start with starting the statistical hypothesis. A
statistical hypothesis is a conjecture about the population parameter. This conjecture may
or may not be true. There are two types of statistical hypotheses: the null hypothesis and
alternative hypothesis.

A.Two types of Statistical Hypotheses

1.Null Hypotheses, symbolized by H0, is a statistical hypothesis testing that assumes that
the observation is due to a chance factor. In hypothesis testing, null hypothesis is denoted
by; H0: µ1 = µ2, which shows that there is no difference between the two population
means (or parameters).

2. Alternative hypothesis, symbolized by H1, is the opposite of the null hypothesis; it

shows that observations are the result of a real effect. It states that there is a difference
between two population means (or parameters).

B.Level of Significance

In hypothesis testing, thelevel of significancerefers to the degree of significance in

which we accept or reject the null hypothesis. In hypothesis testing, 100% accuracy is not
possible for accepting or rejecting a null hypothesis. So, we therefore select a level of
significance that is usually 1% and 5%. Level of significance is the maximum probability
of committing a Type I error. That is, P (Type I error) = α. This probability is symbolized
by α (Greek letter alpha).

After the significance level is chosen, a critical value is selected from a table for the
appropriate test statistic. The critical value determines the critical and noncritical regions.
The critical value is a value that separates the critical region from the noncritical region.
The critical or rejection region is the range of the values of the test value that indicates
that there is significant difference and that the null hypothesis (H 0) should be rejected. On
the contrary, noncritical or nonrejection region is the range of the values of the test
value that indicates that the difference was probably due to chance and that null
hypothesis (H0) should not be rejected.

C. One-tailed versus Two-tailed test

A one-tailed test shows that the null hypothesis be rejected when test value is in the
critical region on one side of the mean. It may be either a right-tailed test or left-tailed
test, depending on the direction of the inequality of the alternative hypothesis. On the
other hand, a two-tailed test, the null hypothesis should be rejected when the test value is
in either of the two critical regions. Table 8.1 shows the relationship between signs in
hypothesis and the tails of the test.

Table 8.1: Relationship between Signs in Hypothesis and the Tails of the Test

Two-tailed test Left-tailed test Right-tailed test

Signs in the H0 H0: µ = k H0: µ= k or H0:µ ≥ k H0: µ = k or H0: µ ≤ k
Signs in the H1 H1: µ ≠ k H1: µ < k H1: µ > k
Rejection Region In both tails In the left tail In the right tail
where k represents a specified number

Table 8.2 presents some common phrases that are used in hypotheses, conjectures, and its
corresponding symbols. The table served as a guide in translating verbal conjectures into
mathematical symbols or representations.

Table 8.2: Common Phrases in Hypotheses Testing

Is equal to ≠ Isnot equal ¿ Isnot the same ¿ Isdifferent ¿ ¿
{
{
¿ Is the same as
Is exactly the same as
¿

Is increased Is decresed
{
¿ Is greater than
Is higher than {
¿ Isless than
Is lower than
Isat least Isat most
≥
{ Is not less than
Is greater than∨equal
¿
¿ ≤
{ Is not more than ¿
Is less than∨equal
¿

D. The Critical Value Approach to Hypothesis Testing

The observed value of the statistics (sample observations) is compared to critical

values (population observation). These critical values are expressed as standard z values.
For instance, if we use a level of significance of 0.05, the size of the rejection region is
0.05.

Figure 8.1: Finding the Critical Values for α = 0.05 (Right-tailed test)

Rejection region
α = 0.05

Figure 8.2: Finding the Critical Values for α = 0.05 (Left-tailed test)

Rejection Region
α = 0.05

If the test is two-tailed; the rejection region is divided into two equal parts (i.e. we
divided 0.05 into two equal parts of 0.025 each). A rejection region of 0.025 in each tail
of the normal distribution results in the cumulative area of 0.025 below the critical value
in the left tail and a cumulative area of 0.025 above the upper critical value of the right
tail.

Figure 8.3: Testing the Hypothesis about the Mean (_ Known) at 0.05 Significance Level
 Table 8.3: Possible Outcome of a Hypothesis Test
Statistical Decision H0: True H0: False
Do not reject H0 Correction decision Type II error
Confidence = 1 - α P (Type II error) = β
Reject H0 Type I error Correction decision
P (Type I error) = α Power = 1 - β

A Type I error occurs if one rejects the null hypothesis when it is true. In hypothesis
testing type I error is denoted by alpha (α). In hypothesis testing, the normal curve that
shows the critical region is called the alpha region.

A Type II error occurs if one does not reject the null hypothesis when it is false. In
hypothesis testing, type II errors ate denoted by beta (β). In hypothesis testing, the normal
curve that shows the acceptance region is called the beta region.

The hypothesis testing situation can be compared to a court trial. In a court trial, there
are four possible outcomes. The defendant is either guilty or innocent, and will be
convicted or acquitted. The hypotheses are

H0: The defendant is innocent and H1: The defendant is guilty.

Next, the prosecutor will present the evidence and based on this evidence, the judge
decides the verdict, innocent or guilty. If the defendant is acquitted and did not commit
the crime, a correct decision has been made by the judge. On the other hand, if the
defendant is acquitted and has committed the crime, then Type II error has been made.

If the defendant is convicted but did not commit the crime, then a Type I error has
been committed. On the contrary, if the defendant is convicted and has committed the
crime, then a correct decision has been made.
The following are the steps in conducting hypothesis testing

1.State the null hypothesis (H0) and the alternative hypothesis (H1).
2. Choose the level of significance, α, and the sample size.
3. Determine the test statistic and sampling distribution.
4. Determine the critical values that divide the rejection and nonrejection regions.
5. Collect the data and compute the value of the test statistic.
6. Make a statistical decision.
7. State the conclusion.

8.3: Hypothesis Testing using p-value

Usually statisticians test hypotheses at α level of 0.05 and 0.01 and occasionally at
0.10. Remember that the level depends on the importance of the type I error.

The p-value (or probability value) is the probability of getting a sample statistic or a
mean extreme sample statistic in the direction of the H 1 when the H0 is true. We can also
say that p-value is the actual area under the standard normal distribution curve
representing the probability of a particular sample statistic or a more extreme sample
statistic occurring if the H0 is true.
The p-value method for testing hypotheses differs from traditional method in some
parts. The steps for p-value method are

1. State the null hypothesis (H0) and the alternative hypothesis (H1).
2. Choose the level of significance, α, and the sample size.
3. Determine the test statistic and sampling distribution.
4. Compute the test value.
5. Determine the p-value.
6. Make a statistical decision.
7. State the conclusion.

There is a different approach in the decision rule when using a p-value method.

 If p-value < α, reject the H0, and if p-value > α, do not reject the H0.

There are also some important guidelines for p-values

 If p-value < 0.01, reject the H0, thus difference is highly significant.
 If p-value > 0.01 and p-value <0.05, reject the H0, thus difference is significant.
  If p-value > 0.05 and p-value < 0.10, consider a consequence of type I error
before rejecting the H0, thus difference is significant.
 If p-value > 0.10, do not reject the H0, thus difference is not significant.

8.4:Confidence Intervals and Hypothesis Testing

Another concept of hypothesis testing is the relationship between hypothesis testing

and confidence intervals. The relationship between confidence interval and hypothesis
testing can be summarized into two

 When the confidence interval contains the hypothesized mean, do not reject H0.
 When the confidence interval does not contain the hypothesized mean, reject H0.

In general, when the H0 is not rejected, the confidence interval calculated at the same
time significance level will contain the value of the mean that is stated in the H0. On the
contrary, when the H0 is rejected, the confidence interval calculated at the same
significance level will not contain the value of the mean that is stated in the H0. These
results are true for other hypothesis testing situations and are not only applicable to
means test.

8.5:One sample z test

The one sample z test is a statistical test for the mean of a population. It is used when
n >30, or when the population is normally distributed and population standard deviation
is known. The formula for the z test is

observed value−expected value

Test value=
standard error

The observed value is the statistic (or the computed sample mean) obtain in the
sample data; while the expected value is the parameter (or the population mean) that one
would expect to obtain if the null hypothesis were true (or the hypothesized value). The
dominator represents the standard error of the statistic being tested.

X́ −μ
z= (Formula 8-1)
σ / √n

X́ −μ
z= (Formula 8-2)
s /√ n

The denominator σ / √ n or s/ √ n represents the standard error of the mean. The term
standard error of the mean may sound uncomfortable, but it is to be interpreted in the
same way as any other standard deviation. We could just as well say “standard deviation
of the mean.” The important thing is that standard error of the mean means the standard
deviation of the sampling distribution of mean.

We can use Formula 8-1 to determine z test value if _ is known, otherwise we will
apply Formula 8-2. To understand all, the concepts, let us examine the following
illustrative examples in the later part of the section.

Assumption in One Sample z test:

1. Subjects are randomly selected.
2. Population distribution is normal.
3. The population should be known.
4. Cases of the sample should be independent.
5. Sample size should be greater than or equal to 30.

Procedure for One Sample z test:

1. Set up the hypotheses:

H0 µ = specified value
H1 µ ≠ <,> = specified value

2. Set the level of significance and determine the critical value of z.

3. Calculate the sample mean for one sample z test by using Formula 3-1:

X́ =
∑X (Formula 3-1)
n

where: X́ = sample mean

n = number of observations in the sample
Note: Calculate the sample standard deviation if σ is unknown

4. Calculate the value of the one sample z test, by using Formula 8-1 if _ is known,
otherwise use Formula 8-2.

5. Statistical decision for hypothesis testing:

If zcomputed<zcritical, do not reject H0.

If zcomputed ≥ zcritical, reject H0.

6. State the conclusion.

Example 1: A researcher reports that the average salary of College Deans is more than
63,000. A sample of 35 College Deans has a mean salary of 65,700. At α = 0.01, test the
claim that the College Deans earn more than 63,000 a month. The standard deviation of
the population is 5,250.
Solution:

Given: X́ = ₱65,700, µ = ₱63,000, σ =¿₱5,250, n = 35

Step 1: State the hypotheses and identity the claim.

H0: μ ≤₱63,000
H1: µ ¿ ₱63,000 (claim)

Step 2:The level of significance is α = 0.01.

Step 3:The z critical value is 2.326 (it is a one-tailed test, since it does mention about the
direction of the distribution.).

Note: we can obtain the critical z value using Table B-Student’s t Distribution in
the appendix section of the text.

Step 4: Compute the one sample z test value using Formula 8-1.

X́ −μ 65,700−63,000
z= = = 3.043
σ / √n 5,250/ √ 35

Step 5:Decision rule.

Reject the null hypothesis at α = 0.01, since 3.043 > 2.326.

Reject H0

Step 6:Conclusion.

Since we reject the null hypothesis, we can conclude that there is enough evidence
to support the claim that the monthly salary of College Deans is more than
63,000.

Example 2: The average baptismal cost includes 50 guests. A random sample of 32

baptismal during the past year in the National Capital Region had a mean of 53 guests
and a standard deviation of 10. Is there sufficient evidence at the 0.05 level of
significance that the average number of guests differs from the national average?

Solution:

Given: X́ = 53, µ = 50, s=¿10, n = 32

Step 1: State the hypotheses and identity the claim.

H0: μ=¿50
H1: µ ≠ 50 (claim)

Step 2:The level of significance is α = 0.05.

Step 3:The z critical value is +1.960 (it is a two-tailed test, since it does not mention
about the direction of the distribution).

Step 4: Compute the one sample z test value.

X́ −μ 53−50
z= = = 1.697
s /√ n 10/ √ 32

Step 5:Decision rule.

Do not reject the null hypothesis at α = 0.05, since 1.697 < 1.960.

Do not reject H0

Step 6:Conclusion.

Since we do not reject the null hypothesis, we can conclude that there is no
enough evidence to support the claim that the average guest in a baptismal is not
equal to 50.

Example 3: A researcher claims that the monthly consumption of coffee per person is
more than 19 cups. In a sample of 60 randomly selected people, the mean monthly
consumption was 20. The standard deviation of the sample was 4 cups. Find the p-value
of the test. On the basis of the p-value, is the researchers claim valid at α = 0.01?

Solution:

Given: X́ = 20, µ = 19, s=¿4, n = 60

Step 1:state the hypotheses and identity the claim.

H0: μ ≤19 cups

H1: µ ¿ 19 cups (claim)
Step 2: The level of significance is α = 0.01.

Step 3: Compute the one sample z test value.

X́ −μ 20−19
z= = = 1.94
s /√ n 4 / √ 60

Step 4: Find the p-value.

The area under the curve for z = 1.94 is 0.4738. Subtracting the area from 0.5000,
one gets 0.5000 – 0.4738 = 0.0262. The p-value is 0.0262.

Step 5: Decision rule.

We will not reject the null hypothesis, since 0.0262 > 0.01 (that is, p-value >
0.01). See the next figure.

Step 6: Conclusion.
Since we fail to reject the null hypothesis, we can conclude that the monthly
consumption of coffee per person is not more than 19 cups.
Example 4: Powder milk is packed in 1-kilogram bag. An inspector from the Department
of Trade and Industry (DTI) suspects the bags may not contain 1 kilogram. A sample of
40 bags produces a mean of 0.96 kilograms and a standard deviation of 0.12 kilogram. Is
there enough evidence to conclude that the bags do not contain 1 kilogram as stated at α =
0.05. Also, find the 95% confidence interval of the true mean.
Solution:

Given: X́ =0.96 , µ = 1.00, s = 0.12, n = 40

Step 1: State the hypotheses and identify the claim.

H0: µ = 1 kilogram
H1: µ ≠ 1 kilogram (claim)

Step 2: The level of significance is α = 0.05.

Step 3: The t critical value is ±1.960 (it is two-trailed test, since it does not mention about
the direction of the distribution).

Step 4: Compute the one sample z test value.

X́ −μ 0.96−1.00
z= = =¿-2.108
s / √ n 0.12/√ 40

Step 5: Decision rule.

Since the computed absolute value of z value is greater than the absolute value of
z critical value at α = 0.05 (2.108 > 1.960), we have to reject the null hypothesis.

Reject H0

Step 6: Conclusion.

Since we reject the null hypothesis, we can conclude that there is enough evidence
to support the claim that the bags of powder milk do not weigh 1 kilogram.

Step 7: Compute the 95% confidence interval using Formula 7-2.

( √sn )< μ< X́+ ¿z ( √sn )

X́ - zα/2 α/2

0.12 0.12
0.96 – (1.960)( ) < μ<0.96+ ( 1.960 ) (
√ 40 √ 40 )
0.96 – 0.037 < µ < 0.96 + 0.037
0.923 <µ< 0.997
Notice that 95% confidence interval of µ does not contain the hypothesized value µ = 1.
Therefore, there is an agreement between the hypothesis test and the confidence interval.

8.6 One Sample t Test

One Sample t Testis a statistical procedure that is used to know the mean difference
between the sample and the known value of the population mean. We draw a random
sample from the population and then compare the sample mean with the population mean
and make a statistical decision as to whether or not the sample mean is different from the
population. The sample size should be less than 30.

Assumptions in One Sample t test:

1. The population must be approximately normally distributed.
2. Sample drawn from the population should be random.
3. Cases of the samples should be independent.
4. Sample size should be less than 30.
5. The population mean should be known.

Procedure for One Sample t test:

1. Set up the hypotheses:

H0: µ = specified value

H1: µ ≠, <, > specified value

2. Set the level of significance, calculate the degree of freedom (df = n – 1) and determine
the critical value of t.

3.Calculate the sample mean and sample standard deviation for one sample t test by using
Formula 3-1 and Formula 4-5.

X́ =
∑X (Formula 3-1)
n

∑ ( X − X́ )2
s=
√ n−1
(Formula 4-5)

where: X́ = sample mean.

s = sample standard deviation.
n = number of observation in the sample.

4. Calculate the value of the one sample t test, by using Formula 8-3:

X́−μ
t= (Formula 8-3)
s/ √ n

where: t = one sample mean.

X́ = sample mean.
µ = population mean.
s = sample standard deviation.
n = number of observation in the sample.

5. Statistical decision for hypothesis testing:

 If tcomputed<tcritical, do not reject Ho.
If tcomputed ≥ tcritical, reject Ho.

6. State the conclusion.

Example 1: One of the undersecretary of the Department of Labor and Employment

(DOLE) claims that the average salary of civil engineer is ₱18,000. A sample of 19 civil
engineer’s salary has a mean of ₱17,950 and a standard deviation of ₱1,230. Is there
enough evidence to reject the undersecretary’s claim at α = 0.01?

Solution:

Given: X́ = ₱17,350, µ = ₱18,000, s = ₱1,230, n = 19

Step 1: State the hypotheses and identify the claim.

H0: µ = ₱18,000 (claim)

H1: µ ≠ ₱18,000

Step 2: The level significance is α = 0.01 and df = n –1 = 19 – 1 = 18.

Step 3: The t critical value is ±2.878 (it is a two-trailed test, since it does not mention
about the direction of the distribution). (Refer to Table B)

Step 4: Compute the one sample t test value.

X́−μ 17,350−18,000
t= = = -2.303
s/ √ n 1,230/√ 19

Step 5: Decision rule.

Do not reject the null hypothesis at α = 0.01, since - 2.303 > - 2.878.

Do not reject H0

Step 6: Conclusion.
Since we fail to reject the null hypothesis, we can conclude that the starting salary
of civil engineer is ₱18,000.
Example 2: The average family size in the Philippines was reported as 4.25. A random
of families in a particular street resulted in the following family sizes: 5, 6, 7, 4, 3, 8, 2,
and 9. At α = 0.10, does the average family size more than the national average?

Solution:

Given: µ = 4.25 and n = 8

Step 1: State the hypotheses and identify the claim.

H0: µ ≤ 4.25
H1: µ > 4.25 (claim)

Step 2: The level significance is α = 0.10 and df = n – 1 = 8 – 1 = 7.

Step 3: The t critical value is 1.415 (it is one-trailed test, since it is indicated that it is
more than the national average). (Refer to Table B)

Step 4: Compute the one sample t test value.

Before we can compute for the one sample t-test, we need to obtain the sample
mean and sample standard deviation first using Formula 3-1 and Formula 4-5, and
then apply Formula 8-3 to obtain the value of one sample t test.

X́ =
∑X =
5+6+7+ 4+ 3+8+2+9 44
= = 5.50
n 8 8

∑ ( X − X́ )2 2 2 2 2 2
= (5−5.5) +(6−5.5) +(7−5.5) + …+ ( 2−5.5 ) +(9−5.5) = 42 =
s=

2.45
√ n−1 √ 8−1 √ 7

Substitute the values of the sample mean and sample standard deviation to obtain
t test value.

X́−μ 5.50−4.25
t= = = 1.443
s/ √ n 2.45−√ 8

Step 5: Decision rule.

Since the computed t value is greater than the t critical value at α = 0.10 (1.443 >
1.415), we need to reject the null hypothesis.
 Reject H0

Step 6: Conclusion.

Since we reject the null hypothesis, we can conclude that there is enough evidence
to support the claim that the average family size is more than 4.25.

Example 3: A researcher claims that 20 year old women on a special diet will have an
average weight of 110 pounds. A sample of 15 women has an average weight of 112.5
pounds and a standard deviation of 5 pounds. At α = 0.01, can the claim be rejected?
Also, find the 99% confidence interval of the true mean.

Solution:

Given: X́ = 112.5, µ = 110 pounds, s = 5 pounds, n = 15

Step 1: State the hypotheses and identify the mean.

Ho: µ = 110 pounds (claim)

H1:µ ≠ 110 pounds

Step 2: The level of significance is α = 0.01 and df = n – 1 = 15 –1 = 14.

Step 3:The t critical value ±2.977 (it is two-trailed test, since it does not mention about
the direction of the distribution). (Refer to Table B)

Step 4: Compute the one sample t test value.

X́−μ 112.5−110
t= = = 1.936
s/ √ n 5 /√ 15
 Do not reject H0

Since the computed t value is less than the t critical value at α = 0.01 (1.936 <
2.977), we will not reject the null hypothesis.

Step 6: Conclusion.

Since we fail to reject the null hypothesis, we can conclude that there is not
enough evidence to reject the claim that the average weight of women is 110
pounds.

Step 7: Compute the 99% confidence interval.

s s
( )
X́ - tα/2
√n ( )
< μ< X́+ ¿tα/2
√n
5 5
112.5 – (2.977)( )< µ < 112.5 + (2.977)( )
√15 √ 15
112.5 – 3.843 < µ < 112.5 + 3.843
108.657 < µ < 116.343

Do not reject H0

The 99% confidence interval contains the hypothesized mean µ = 110. Thus, there is
an agreement between the hypothesis test and the confidence interval.

Researchers occasionally have difficulty deciding whether to use the z test or t test.
The rules are the same as those pertaining to confidence interval. The rules are
summarized in Figure 8.4

Figure 8.4: Using z test or 1 test

Use:
Is σ known?

X́ −μ Is n ≥ 30?
Use: z=
σ / √n
 Yes No

Yes No

8.7 Z Test for Proportion

A lot of hypothesis testing situations involve proportion (proportion is the same as a

percentage of the population). This test can be considered as a binomial experiment when
there are only two outcomes and the probability of success does not change from trial to
trial ( the outcomes of each trial are independent ). Given that a normal distribution can
be used to approximate the binomial distribution when np> 5 and nq> 5, the standard
deviation can be used to test the hypotheses for proportion is:

p^ − p
z= (Formula 8-4)
√ pq /n
where: z = z test for a proportion.
p̂ = sample proportion (X/n).
p = population proportion.
n = number of observation in the sample.
q = 1 – p.

Assumption in z test for proportion

1. Subjects are randomly selected.
2. Population distribution is normal.
3. Observations are dichotomous.

Procedure for z test for a proportion:

1. Set up the hypotheses:

H0: p = specified value

H1: p ≠, <, > specified value

2. Set the level of significance and determine the critical value of z.

3. Calculate the sample proportion.

4. Calculate the value of the one sample z test for proportion, by using Formula 8-4.
5. Statistical decision for hypothesis testing:

If zcomputed<zcritical, do not reject H0.

If zcomputed ≥ zcritical, reject H0.

6. State the conclusion.

Example 1: A recent survey done by Philippine Housing Authority found that 35% of the
population owns their homes. In a random sample of 240 heads of households, 78
responded that they owed their homes. At the 0.01 level of significance, does that
indicate a difference from the national proportion?

Solution:

Given: X́ = 78, n = 240, p = 35% = 0.35

Step 1: State the hypotheses and identify the claim.

H0: p = 0.35 (claim)

H1: p ≠ 0.35

Step 2: The level of significance is α = 0.01.

Step 3: The z critical value is +2.576 (it is two-trailed test).

Step 4:Compute the test value. First, it is necessary to solve for p.

X 78
p̂ = = = 0.325 and p = 0.35 and q = 1 – p = 1 – 0.35 = 0.65
n 240

Substitute in Formula 8-4 and solve.

p^ − p 0.325−0.35
z=
√ pq /n
= √(0.35)(0.65)/240 = -0.812

Step 5: Decision rule.

Do not reject the null hypothesis, since the test value falls outside the critical
region, as shown in the figure below.
Do not reject H0

Step 6: Conclusion.

Since we fail to reject the null hypothesis, we can conclude that there is not
enough evidence to reject the claim that 35% of the Filipinos owned their homes.

Example 2: The professional organization for private colleges and universities professors
reported that more than 17% of professors attended a national convention in the past year.
To test this claim, a researcher surveyed 200 professors and found that 45 had attended a
national convention in the past year. At α = 0.05, test the claim that this figure is
corrected using p-value method.

Solution:

Given: X́ = 45, n = 200, p = 17% = 0.17

Step 1: State the hypotheses and identify the claim.

H0: p ≤ 0.17
H1: p > 0.17 (claim)

Step 2: Compute the test value. First, it is necessary to solve for p̂.
X 45
p̂ = = = 0.225 and p = 0.17 and q = 1 – p = 1 – 0.17 = 0.83
n 200

Substitute in Formula 8-4 and solve.

p^ − p 0.225−0.17
z=
√ pq /n
= √(0.17)(0.83)/200 = 2.07

Step 3: Find the p-value.

The area under the curve for z = 2.07 is 0.4808. Subtracting the area from 0.5000,
one gets 0.5000 – 0.4808 = 0.0192. The p-value is 0.0192.

Step 4: Decision rule.

 Reject the null hypothesis, since 0.0192 < 0.05 (that is, p-value < 0.05). See the
next figure.

Step 5: Conclusion.

Since we reject the null hypothesis, we can conclude that there is enough evidence to
support the researcher’s claim that more than 17% of the professors attended a national
convention.

Name: __________________________________Date:_______________Score:_______

Section Exercise 8.5

1. A report in LTO stated that the average age of taxis in the Philippines is 9 years. An
operation manager of a large taxi company selects a sample of 40 taxis and finds the
average age of the taxis is 8.2 years. The σ of the population is 2.3 years. At α = 0.05, can
it be concluded that the average age of the taxis in his company is less than the national
average?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
_
 H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = _______ and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = ___________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

2. Average college cost of tuition fee for all private institutions last year was ₱36,400. A
random sample of costs this year for 45 institutions of higher learning indicated that the
sample mean was ₱37,900 and a sample standard deviation was ₱5,600. At the 0.10 level
of significance, is there sufficient evidence to conclude that the cost has increased?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = _______ and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = ___________.

Name: __________________________________Date:_______________Score:_______

Section Exercise 8.5

Step 4: Decision rule.
________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

3. A fitness center claims that its members lose an average of 12 pounds or more the first
month after joining the center. An independent agency that wanted to check this claim
took a sample of 45 members and found that they lost an average of 10 pounds within the
first month with standard deviation of 3 pounds. Find the p-value for this test. What will
your decision be if α =0.05?
Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = _______ and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = ____ and p-value = _____.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

4. The treasure of a municipality claims that the average net worth of families living in
this municipality is ₱590,000. A random sample of 50 families selected from this area
produced a mean net worth of ₱720,000 with standard deviation of ₱65,000. Using 1%
significance level, can we conclude that the claim is true? Also, find the 99% confidence
interval of the true mean.

Solution:

Step 1: State the hypotheses.

Name: __________________________________Date:_______________Score:_______

Section Exercise 8.5

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = _______ and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = ___________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________
Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________
Name:________________________________Date:_________________Score:________

Section Exercise 8.6

1. A survey of National Capital Region finds the average commute time of employees on
one way is 30 minutes. The Makati Chamber of Commerce feels that in their city is
greater and wants to publicizethis. They randomly select 28 commuters and finds the
average is 35 minutes with a standard deviation of 6 minutes. At α = 0.05, are they
correct?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________
Step 2: The level of significance and critical region. α = ___, df = ____ and tcritical = ____.

Step 3: Compute for the value of one sample t test. tcomputed = _________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

2. The average pre-school cost for tuition fees last year was ₱74,200. The following year,
20 institutions had a mean of ₱13,100 and a standard deviation of ₱2,250. Is there
sufficient evidence at α = 0.10 level of significance to conclude that the mean cost has
increased?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = ____, df = ____ and tcritical = ___.

Step 3: Compute for the value of one sample t test. tcomputed = _________.

Name:________________________________Date:_________________Score:________

Section Exercise 8.6

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

3. A consumer advocacy group suspects that a local supermarket’s 500 grams of sugar
actually weigh less than 500 grams. The group took a random sample of 20 such
packages, weigh each one, and found the mean weight for the sample to be 496 grams
with a standard deviation of 8 grams. Using 10% significance level, would you conclude
that the mean weight is less than 500 grams? Also, find the 90% confidence interval of
the true mean.
Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = ____, df = ____ and tcritical = ___.

Step 3: Compute for the value of one sample t test. tcomputed = _________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

Step 6: Confidence interval.

________________________________________________________________________

Name:________________________________Date:_________________Score:________

Section Exercise 8.6

4. A fruit juice franchise company has a policy of opening new fruit juice stand only on
those areas that have a mean household income of at least ₱30,500 a month. The
company is currently considering an area in which to open a new fruit juice stand. The
company’s research department took a sample of 25 households from this area and found
that the mean monthly income of these households is ₱38,600. Using 5% significance
level, would you conclude that the company should open a fruit juice stand in the area?
Also, find the 95% confidence interval of the true mean.

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________
Step 2: The level of significance and critical region. α = ____, df = ___ and tcritical = ____.

Step 3:Compute for the value of one sample t test. tcomputed = _________.

Step 4:Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5:Conclusion.
________________________________________________________________________
________________________________________________________________________

Step 6:Confidence interval.

________________________________________________________________________

5. A researcher estimates that the average height of buildings in terms of the number of
storey in the National Capital Region is at least 15 storeys. A random sample of 12
building is selected, and the numbers of storey are shown. At α = 0.01, is there enough
evidence to reject the claim?

20 10 8 15 17 25
36 35 12 28 16 30

Solution:

Step 1: State the hypotheses.

Name:________________________________Date:_________________Score:________

Section Exercise 8.6

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance is ________ and df = __________.

Step 3: Determine the critical region. tcritacal = __________.

Step 4: Complete the table and compute for the value of sample mean, standard deviation
and one sample t test.

X X − X́ ( X − X́ )2 X X − X́ ( X − X́ )2
20 40
10 35
8 12
15 28
17 16
 25 30

n = __________ X́ = __________ s = __________ tcomputed = __________

Step 5: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 6: Conclusion.
________________________________________________________________________
________________________________________________________________________

Name:________________________________Date:_________________Score:________

Section Exercise 8.7

1. The school registrar estimates that the dropout rate of freshmen high school in
Mindanao is 20%. Last year, 45 freshmen from random sample of 250 Mindanao
freshmen high school withdrew. At 0.01, is there enough evidence to reject the registrar’s
claim?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = ________, and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = _________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

2. A certified public accountant (CPA) claims that more than 30% of all accountants
advertise. A sample of 300 accountants in Metro Manila showed that 84 had used some
form of advertising. At α = 0.01, is there enough evidence to support the claim? Use p-
value method.
Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: Compute for the value of one sample t test. tcomputed = __________.

Step 3:Compute for the p-value. p-value = __________.

Name:________________________________Date:_________________Score:________

Section Exercise 8.7

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

3. Achaiahmade a claim that at least 5% of the college male students drives racing car.
His friend Sofia finds this hard to believe and decided to check the validity of
Achaiah’sclaim, so she took a random sample. At 0.05, does Sofia have sufficient
evidence to reject Achaiah’sclaim if there were 19 racing car in her sample of 250 cars?

Solution:

Step 1: State the hypotheses.

H0:_______________________________________________________________
 H1:_______________________________________________________________

Step 2: The level of significance and critical region. α = ________, and zcritical = _______.

Step 3: Compute for the value of one sample z test. zcomputed = _________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________

4. The GSIS states that 80% of its claims are settled within a month. A consumer group
selected a random sample of 180 of the company’s claims to test this statement. If it is
found that 150 of the claims were settled, do they have sufficient reason to support their
contention that less than 80% of the claims are settled within a month? Use a p-value
method, at α = 0.05.

Solution:

Step 1: State the hypotheses.

Name:________________________________Date:_________________Score:________

Section Exercise 8.7

H0:_______________________________________________________________
H1:_______________________________________________________________

Step 2: Compute for the value of one sample t test. tcomputed = __________.

Step 3:Compute for the p-value. p-value = __________.

Step 4: Decision rule.

________________________________________________________________________
________________________________________________________________________

Step 5: Conclusion.
________________________________________________________________________
________________________________________________________________________
 Bibliography
Right-tailed test and Left-tailed test
 https://cnx.org/contents/MBiUQmmY@16.2:epKVS0wt@4/Additional-
Information-and-Ful
Two-tailed test
 https://onlinecourses.science.psu.edu/stat500/node/44