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    Z-Test (Two Sample Means)

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    In Dallas, some fire trucks were painted yellow (instead of red) to heighten their visibility. During a test period, the fleet of red fire trucks made 153,348 runs and had 20 accidents, while the fleet of yellow fire trucks made 135,035 runs and had 4 accidents. At Alpha = .01, did the yellow fire trucks have a significantly lower accident rate? (a) State the hypotheses. (b) State the decision rule and sketch it. (c) Find the sample proportions and z test statistic. (d) Make a decision. (e) Find the p-value and interpret it. (f ) If statistically significant, do you think the difference is large enough to be important? If so, to whom, and why? (g) Is the normality assumption fulfilled? Explain.

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    Solution Summary

    The solution provides step-by-step method of performing a two sample z-test. All the steps of hypothesis testing (formulation of null and alternate hypotheses, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) have been explained in details.