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# Statistics Null Hypothesis Rejection

An economic researcher would like to know whether he can reject the null hypothesis at the 0.10 level, that no more than 20% of the households in Pennsylvania make more than \$70,000 per year.

a. If 200 Pennsylvania households are chosen at random, how many of them would have to be earning more than \$70,000 per year for the researcher to reject the null hypothesis?

b. Assuming that the true proportion of all Pennsylvania households with annual incomes of at least \$70,000 is 0.217, find the probability of not rejecting a false null hypothesis when the sample size is 200.

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The solution is given below.

Null hypothesis

An economic researcher would like to know whether he can reject the null hypothesis at the 0.10 level, that no more than 20% of the households in Pennsylvania make nore than \$70,000 per year.

a. If 200 Pennsylvania households are chosen at random, how many of them would have to be earning more than \$70,000 per year for the researcher to reject the null hypothesis?

Let p be the proportion of households that earn more than ...

#### Solution Summary

Binomial probability distribution
Probability of not rejecting a false null hypothesis

\$2.19