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New pesticide testing

A pesticide company wanted to test the formulation of a new pest control chemical with respect to its effectiveness in killing roaches. The existing pesticide had an effectiveness rate of 70%. The existing chemical will be replaced if it can be proved that the new chemical is more effective. To test the new chemical, they test it out on 1000 roaches. After about an hour they find that 800 are dead. At the 5% significance level should they replace the existing chemical?

Solution Summary

The posting calculates the effectiveness of a new pesticide compared to the old pesticide based on a hypothesis test.