ECON 257D2 Lecture Notes - Lecture 1: Ejection Seat, Type I And Type Ii Errors, Mechanism Design
4 Apr 2015
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A few problems (answers discussed in class will be posted after): in a sample of 400 adults and 600 teenagers 100 adults and 300 teenagers liked a tv program. Suppose that it is claimed that the probability that a teenager likes the program more than 20% higher than for an adult. There is a view that the mean is actually lower (which if true could lead to a cost reduction in the manufacturing process). (4)(a) state the hypotheses. Given a sample of 64 ob- servations with average of 124 kg test the hypothesis at. 5% level. (5) (b) find the prob-value for the sample average under the conditions in (a). Based on the prob-value test the hypothesis at 1%. (5) (c) suppose that in reality the mean is 125 kg. Find the probability of type ii error for (cid:11) = :01 and the power of the test. (3) (d) indicate how one could increase the power of the test.
