Determine the probability and power curve, Macroeconomics

Assignment Help:

Learning Objective: Reinforce understanding of Power, β, and α.

Problem: A packing process is designed to fill steel drums with 400 pounds of a chemical. To determine whether or not the process is working properly, a significance test has been designed. The null and alternative hypotheses are:

H0: μ = 400

Ha: μ ≠ 400

where μ is the average amount of chemical filled in the drums. It is decided to reject H0 if the average weight of a random sample of 36 drums is less than 390 pounds or if the average weight of a random sample of 36 drums is greater than 410 pounds. Assume that the population standard deviation is equal to 42, and that the drum fill weights are normally distributed.

Requirements:

1. Determine the probability (rounded to 2 decimal places) of committing a Type I error for this decision rule? Include all calculations in your submission report.

2. Create a power curve for this decision rule using the following alternate values for μ:

375, 380, 385, 390, 395, 400, 405, 410, 415, 420, 425. Include any manual calculations you do in the assignment submission.

3. Provide specific advice for modifying the test to ensure both of the following

a. a maximum probability of Type I error equal to 0.05

b. a maximum probability of Type II error equal to 0.15 when the mean amount of chemical in the drums is actually 410 pounds.


Related Discussions:- Determine the probability and power curve

How not to justify say''s law, At first, Say's Law may seem 'obvious'. Thou...

At first, Say's Law may seem 'obvious'. Though, it's not - actually, it's highly controversial. The reason it may seem obvious is that you have perhaps learned from microeconomics

Determine the inflation rate in germany between 1992-2010, Inflation in Ger...

Inflation in Germany Once we have monthly data on a price index we can calculate inflation. In most nations, the percentage change in price index during one month is small. So,

INFLATION-UNEEMPLOYMENT TRADE-OFF UNDER ADAPTIVE EEX, Explain how inflation...

Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002

Company undertake the project, Q1. A company selling widgets advertises thr...

Q1. A company selling widgets advertises through three types of media: print, television and internet. Recently the company has decided to increase its advertising budget by $100,0

Gross domestic production, why is imports subtracted from the expenditure a...

why is imports subtracted from the expenditure approach

Functions of commercial bank - granting a loan, Granting a ...

Granting a loan: When commercial banks lend, they create money. This can be explained by extending the hypothetical example of Bank

Measurement of output, Different approaches to measure aggregate output

Different approaches to measure aggregate output

Full employment and the natural rate, Is the natural rate of unemployment f...

Is the natural rate of unemployment fixed? Why or why not? How are full employment and the natural rate of unemployment related? Is the actual rate of unemployment currently greate

How rates depends on maturity, How rates depends on maturity Rates depe...

How rates depends on maturity Rates depending on maturity. Even though rates with different maturity (all recalculated to a yearly rate) need not be exactly equal, they cannot

Credit, How credit is created or the creation of credit

How credit is created or the creation of credit

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd