EC255 Lecture Notes - Lecture 13: Decision Rule, Standard Deviation, Type I And Type Ii Errors
Document Summary
Ec255 lecture #13: hypothesis testing for single populations. Two types of inferences: estimation, hypothesis testing: testing the validity of statement(s) about an unknown population parameter based on a random sample. An accountant would like to test whether this average has increased over the years. i. e. historically, a company"s market share was no more than 18%. However, because of an increased marketing effort, company officials believe the company"s market share is now greater than 18%. Level of significance and the rejection region level of significance = (1) reject h0 if z < -za (2) reject h0 if z > za (3) reject h0 if z < -za/2 or z > za/2. A sample of 112 cpas produced a mean salary of 965. Assume that the population standard deviation of salaries is 530. In addition, based on the evidence gathered, it may suggest that the average has increased over the 10- year period.
