TYPE I ERROR

Rejecting a null hypothesis when it is true . Its the Significance value of the test .
it symbolized by .
TYPE II ERROR
Accepting a null hypothesis when it is false . Its probability is symbolized by .
DECIDING WHICH DISTRIBUTIONB TO USE IN HYPOTHESIS TESTING
Conditions for using the Normal and t Distributions in Testing Hypothesis about Means
When the Population
When the Population
Standard Deviation is
Standard Deviation is not
known
known
Sample size n is larger than Normal Distribution ; z
Normal Distribution ; z
30
table
table
Sample size n is less than
30 or less

Normal Distribution ; z
table

T Distribution ; t table

Two Tailed and One Tailed Test of Hypothesis

A] A two tailed hypothesis will reject the null hypothesis if the sample mean is
significantly higher than or lower than the hypothesized population mean . Thus in twotailed test there are 2 rejection areas.
A two tailed test is appropriate when the null hypothesis is
= Ho and the alternative hypothesis is Ho .
B] There are situations where two tailed test is not appropriate and one tailed test is
appropriate .
(i) Lower tailed test (left tailed test)
A lower tailed test is appropriate when the null hypothesis is
= Ho and the alternative hypothesis is < Ho .
Left side area is the rejected area.
(ii) Upper tailed test (Right tailed test)
A upper tailed test is appropriate when the null hypothesis is
= Ho and the alternative hypothesis is > Ho .
Right side area is the rejected area.
EXERCISE

1 Foe the following cases, specify which probability distribution to use in hypothesis
testing :
a] Ho : = 27 ; H1 : 27 ; X = 33; ^ = 4 ; n=25
B] Ho : = 98.6 ; H1 : > 98.6 ; X = 99.1; = 1.5 ; n=50
C] Ho : = 3.5 ; H1 : < 27 ; X = 2.8 ; ^ =0.6 ; n=18
D] Ho : = 382 ; H1 : 382 ; X = 363; = 68 ; n=12
E] Ho : = 57 ; H1 : > 57 ; X = 65; ^ = 12 ; n=42
2] Martha Inaman ,a highway safety engineer , decides to test the load bearing capacity
of a brigade that is 20 years old . considerable data are available from similar tests on the
same type of bridge . Which is appropriate , a one-tailed or a two tailed test ? If the
minimum load bearing capacity must be 10 tons , What are the null and alternative
hypothesis .

I] Hypothesis Testing of Means when the Population

Standard Deviation Is Known
(a) Two Tailed Tests of Means : Testing in the Scale of the Original
Variable
Given : Ho : = Ho;
H1 : Ho;
X = Sample Mean ;
^ = Sampel Standard Deviation ;
= Population Standrd Deviation
n= Sample Size
= Level of significance for testing the hypothesis .

x = = Standard Error of the mean

n
(1) find the Z value for the area under curve using Level of significance ;
the z value
(2) then determine the limits of the acceptance region given by ;

Ho z x

(3) Check the sample mean value whteher it falls in between the

accepted limits , if yes accept the null hypothesis otherwise

reject it.
OR
1]find the Z value for the area under curve using Level of significance ; the z
value
2] Instead of converting the critical z values to the original scale to get
numbers directly comparable to the observed value of X , we could have
converted our observed value of X to the standardized scale by using the
equation
X - Ho
z = = observed z value
x
This observed z value is directly comparable to the critical z value .
(Note :The answer by this method is done in 2 steps)
The Five Steps Process for Hypothesis Testing Using the Standardized Scale

1
2
3
4
5

Summary of five Step Process

Decide whether this is a two tailed or a one tailed test . State your
Hypothesis . Select a Level of Significance appropriate for this decision.
Decide which distribution (t or z )is appropriate and find the critical
values for the chosen level of significance from the appropriate table .
Calculate the standard error of sample statistic . Use the standard erro to
convert the observed value of the sample statistic to a standardized value
Sketch the distribution and mark the position of the standardized sample
value and the critical value(s) for the test .
Compare the value of the Satandardized sample statistic with critical
values for this test and interpret the result .

Prob1] Hinton Press hypothesizes that the average life of its largest
web press is 14,500 hours . They know that the standard deviation
of press life is 2,100 hours . From a sample of 25 presses , the
company finds the sample meanof 13,00 hours . At a 0.01
significance level , should the company conclude that the average
life of the presses is less than the hypothesized 14,500 hours ?
Solution:
given :

= 2,100 ; n= 25;
=0.01

= 13,000

(1) As we know the Standard population deviation and the sample size
is less than 30 we use the Normal Distribution .
(2) As the company has to see that the average life of the presses to be less
than the hypothesized 14,500 hours . so one-tailed test to be done

i.e Left Teiled test.

Ho : = 14,500 ;
H1 : < 14,500 ;
(3) As
=0.01 ; area under curbe for rejection of null hypothesis is
0.01 , so the area under curve for acceptance of null hypothesis is 1- 0.01 =
0.99
as the right hand side area is 0.5 so 0.99=0.5 = 0.49 so the z value for the
area 0.49 should be found .
so z = -2.33
(4)

x = = Standard Error of the mean

n
=2,100

25
=420

 - Ho

x
X

z=

= observed Z value

= 13,000 14,500

420
= - 3.57
As -3.57 < -2.33 , we should reject Ho . The average life is less
than the hypothesized value.
Prob 2 ] American theaters know that a certain hit movie ran an
average of 84 days in each city , and the corresponding standard
deviation was 10 days . The managr of southeastern district was
interested in comparing the movies popularity in his region with
that in all of Americans other theaters . He randomly chose 75
theaters in his region and found that they ran the movie an average
of 81.5 days .
(a) State appropriate hypothesis for testing whether there
was a significant difference in length of the pictures
run between theaters in the southeastern district and all
of Americans other theaters.
(b) At a 1 % significance level , test these hypothesis .

II] Hypothesis Testing of Proportions : Large Samples

(I ) Two Tailed tests of Proportions

First remember that the binomial is the theoretically correct

distribution to use in dealing with proportions . As the
sample size increases , the binomial distribution approaches
normal in its characteristics . Specifically , np and nq
each need to be atleast 5 before we can use normal
distribution and substitute for the binomial .
Given : pHo = Hypothesized value of the population
proportion of success ;
qHo= Hypothesized value of the population proportion of
failures ;
n = sample size ;
p = p/n = sample proportion ;
q = q/n = sample proportion ;
Ho : p = pHo
H1 : p pHo
= Level of Significance for testing the Hypothesis .
Solution : step 1
( pHo qHo)
p = = Standard Error of the Proportion
(n)
step 2
p - pHo
z = = Standarized sample proportion
p

prob1] A ketchup manufacturer is in the process of deciding

whether to produce a new extra-spicy brand . The companys
marketing research department used a national telephone survey
of 6,000 households and found that the extra-spicy ketchup would
be purchased by 335 of them . A much more extensive study made
2 Years ago showed that 5 percent of the households would
purchase the brand then . At a 2% significance level ,should the
company conclude that there is an increased interest in the extra
spicy flavor ?
prob2] Steve Cutter sells Big Blade lawn mowers in his hardware
store and he is interested in comparing the reliability of the
mowers he sells with the reliability of Big Blade mowers sold
nationwide . Steve knows that only 15% of all big blades mowers
sold nationwide require repairs during the first year of ownership .
A sample of 120 of Steves customers revealed that exactly 22 of
them required mower repairs in the first year of ownership . At the
0.02 level of significance , is the evidence that Steves Big Blade
mowers differ in reliability from those sold nationwide ?

III] Hypothesis Testing of Means when the Population

Standard Deviation is Not Known
(1) when sample size is greater than 30 Normal
distribution
(2) When sample size less than 30 then use t
distribution . t distribution , has n-1 degree of
freedom .
Remaining same

Prob1] Given a sample mean of 83 , a sample standard deviation 12.5 of

12.5 and a sample size of 22 , test the hypothesis that the value of population
mean is 70 against the alternative that it is more than 70 . Use the 0.025
significance level .