# solution

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. In the previous exercise you simulated the attorney fees of 25 SRSs of 100 Chapter 7 consumer bankruptcy cases. Now use these samples to demonstrate the behavior of a significance test. We know that the population standard deviation is Ïƒ = 433, and we are willing to assume that the sample means are approximately Normal.

(a) Use your software to carry out a test of

H0: Î¼ = 1000

Ha: Î¼ _= 1000

for each of the 25 samples.

(b) Verify the computerâ€™s calculations by using Table A to find the P-value of the test for the first of your samples. Use the x

(c) How many of your 25 tests reject the null hypothesis at the Î± = 0.05 significance level? (That is, how many have P-value

0.05 or smaller?)

(d) Because the simulation was done with Î¼ = 1000, samples that lead to rejecting H0 produce the wrong conclusion. In a very

large number of samples, what percent would falsely reject the null hypothesis?

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