Business Statistics, Second Edition

Chapter 10

Hypothesis Testing

LEARNING OBJECTIVES

After studying this chapter, you should be able to

• explain why hypothesis testing is important

• know how to establish null and alternative hypotheses about a population parameter

• develop hypothesis testing methodology for accepting or rejecting null hypothesis.

• use the test statistic z, t, and F to test the validly of a claim or assertion about the true value of any population parameter.

• understand Type I and Type II errors and its implications in making a decision.

• compute and interpret p-values

• interpret the confidence level, the signifience level, and the power of a test

If there is an opportunity to make a mistake, sooner or later the mistake will be made.

—Edmond C Berekely

10.1 INTRODUCTION ...