EXERCISES

CONCEPTS AND PROCEDURES

1.1. Briefly discuss difference between Null and Alternative Hypothesis. Give an example in
each type of hypothesis.
A null hypothesis states that no relationship exists between two variables. A null
hypothesis is what, the researcher tries to disprove . While an alternative hypothesis
states that there is statistical significance between two measurable phenomena. An
alternative hypothesis is what the researcher wants to prove.
Example: A medical trial is conducted to test whether or not a new medicine reduces
cholesterol by 25%.
Null : The drug reduces cholesterol by 25%. p = 0.25
Alternative : The drug does not reduce cholesterol by 25%. p ≠ 0.25
1.2. Briefly discuss the difference of Type I error and Type II error. Give an example in each
type of errors.
Type I error is a false positive conclusion, while a Type II error is a false negative
conclusion. A Type I error happens when you get false positive results: you conclude that
the drug intervention improved symptoms when it actually didn’t. These improvements
could have arisen from other random factors or measurement errors. A Type II error
happens when you get false negative results: you conclude that the drug intervention
didn’t improve symptoms when it actually did. Your study may have missed key indicators
of improvements or attributed any improvements to other factors instead.
1.3. Briefly discuss the importance of level of significance in accepting or rejecting the null
hypothesis.
Being denoted as alpha or α, is the probability of rejecting the null hypothesis when it is
true. Failing to reject the null indicates that our sample did not provide sufficient evidence
to conclude that the effect exists. However, at the same time, that lack of evidence
doesn't prove that the effect does not exist.

APPLICATIONS

1.4. Some of the following statements refer to the null hypothesis, some to the alternate
hypothesis. State the null hypothesis, H0, and the alternative hypothesis, Ha. State also
the Type I and Type II errors in complete sentences.
a. The mean number of years Filipinos work before retiring is 34.
b. At most 60% of Filipinos vote in presidential elections.
c. The mean starting salary for San Jose State University graduates is at least
Php100,000 per year.
d. Twenty-nine percent of first year college students get drunk each month.
e. Fewer than 5% of adults ride the bus to work in Region XII.
f. The mean number of cars a person owns in her lifetime is not more than ten.
 g. About half of Filipinos prefer to live away from cities, given the choice.
h. Filipinos have a mean paid vacation each year of six weeks.
i. The chance of developing breast cancer is under 11% for women.
j. Private universities' mean tuition cost is more than Php50,000 per year.
a. The mean number of years Filipinos work before retiring is 34.
 H0:μ=34
Ha:μ≠34

 Type I error: We conclude that the mean is not 34 years, when it really is 34 years.

Type II error: We conclude that the mean is 34 years, when in fact it really is not 34
years.

b. At most 60% of Filipinos vote in presidential elections.

 H0:p≤0.60
Ha:p>0.60

 Type I error: We conclude that more than 60% of Filipinos vote in presidential
elections, when the actual percentage is at most 60%.

Type II error: We conclude that at most 60% of Filipinos vote in presidential elections
when, in fact, more than 60% do.
c. The mean starting salary for San Jose State University graduates is at least Php100,000
per year.
 H0:μ≥100,000
Ha:μ<100,000

 Type I error: We conclude that the mean starting salary is less than Php100,000,
when it really is at least Php100,000.

Type II error: We conclude that the mean starting salary is at least Php100,000
when, in fact, it is less than Php100,000.

d. Twenty-nine percent of first year college students get drunk each month.
 H0:p=0.29
Ha:p≠0.29

 Type I error: We conclude that the proportion of first year college students who get
drunk each month is not 29%, when it really is 29%.

Type II error: We conclude that the proportion of first year college students who get
drunk each month is 29% when, in fact, it is not 29%.

e. Fewer than 5% of adults ride the bus to work in Region XII.

 H0:p=0.05
Ha:p<0.05

 Type I error: We conclude that fewer than 5% of adults ride the bus to work in
Region XII, when the percentage that do is really 5% or more.
 Type II error: We conclude that 5% or more adults ride the bus to work in Region XII
when, in fact, fewer that 5% do.

f. The mean number of cars a person owns in her lifetime is not more than ten.
 H0:μ≤10
Ha:μ>10

 Type I error: We conclude that the mean number of cars a person owns in his or her
lifetime is more than 10, when in reality it is not more than 10.

Type II error: We conclude that the mean number of cars a person owns in his or her
lifetime is not more than 10 when, in fact, it is more than 10.

g. About half of Filipinos prefer to live away from cities, given the choice.
 H0:p=0.50
Ha:p≠0.50

 Type I error: We conclude that the proportion of Filipinos who prefer to live away
from cities is not about half, though the actual proportion is about half.
Type II error: We conclude that the proportion of Filipinos who prefer to live away
from cities is half when, in fact, it is not half.

h. Filipinos have a mean paid vacation each year of six weeks.

 H0:μ=6
Ha:μ≠6

 Type I error: We conclude that the duration of paid vacations each year for Filipinos
is not six weeks, when in fact it is six weeks.

Type II error: We conclude that the duration of paid vacations each year for Filipinos
is six weeks when, in fact, it is not.

i. The chance of developing breast cancer is under 11% for women.

 H0:p≥0.11
Ha:p<0.11

 Type I error: We conclude that the proportion is less than 11%, when it is really at
least 11%.

Type II error: We conclude that the proportion of women who develop breast cancer
is at least 11%, when in fact it is less than 11%.

j. Private universities' mean tuition cost is more than Php50,000 per year.
 H0:μ≤50,000
Ha:μ>50,000

 Type I error: We conclude that the average tuition cost at private universities is more
than Php50,000, though in reality it is at most Php50,000.

Type II error: We conclude that the average tuition cost at private universities is at
most Php50,000 when, in fact, it is more than Php50,000.
 CONCEPTS AND PROCEDURES
1.1. Present and explain the different steps in testing hypothesis.
Step 1: State the Hypothesis
A researcher states a null hypothesis about a value in the population(H0) and an alternative
hypothesis that contradicts the null hypothesis.

Step 2: Set the criteria for a decision

A criterion is set up upon which a researcher will decide whether to retain or reject the valued
stated in the null hypothesis. A sample is selected from the population and a sample population is
measured.
Step 3: Compute the test statistic
This will be produce a value that can be compared to the criterion that was set before the sample
was rejected.
Step 4: Make a Decision
If the probability of obtaining a sample mean is less than 5% when the null is true, then reject the
null hypothesis. If the probability of obtaining a sample mean is greater than 5% when the null is
true, then retain the null hypothesis.

1.2. Present and explain the different cases in hypothesis testing.

CASE 1. Hypothesis Testing About Means
Hypothesis testing applications with a continuous outcome variable in a single population
are performed according to the five-step procedure outlined above. A key component is
setting up the null and research hypotheses. The objective is to compare the mean in a
single population to known mean (μ0). The known value is generally derived from another
study or report, for example a study in a similar, but not identical, population or a study
performed some years ago. The latter is called a historical control. It is important in
setting up the hypotheses in a one sample test that the mean specified in the null
hypothesis is a fair and reasonable comparator. 
CASE 2. Test Between Two Sample Means
There are many applications where it is of interest to compare two independent groups
with respect to their mean scores on a continuous outcome. Here we compare means
between groups, but rather than generating an estimate of the difference, we will test
whether the observed is statistically significant or not. Remember, that hypothesis testing
gives an assessment of statistical significance, whereas estimation gives an estimate of
effect and both are important.
Case 3. Test About Single Proportion

Here we consider the situation where there are two independent comparison groups and
the outcome of interest is dichotomous .The goal of the analysis is to compare proportions
of successes between the two groups. The relevant sample data are the sample sizes in
each comparison group (n1 and n2) and the sample proportions (  ) which are
computed by taking the ratios of the numbers of successes to the sample sizes in each
group

 and 
1.3. Explain the meaning of the level of significance 1%, 5%, and 10%.
Level of significance refers to two separate notions: the p-value (the probability that the
observed data would occur by chance in a given single null hypothesis); or the Type I
error rate α (false positive rate) of a statistical hypothesis test (the probability of
incorrectly rejecting a given null hypothesis in favor of a second alternative hypothesis). A
fixed number, most often 0.05, is referred to as a significance level or level of
significance; such a number may be used either in the first sense .01/1%, .05/5% and .
10/10% as a cut-off mark for p-values or in the second sense as a desired parameter in
the test design.

APPLICATIONS

1.4. According to the result of a research conducted by BS Economics students of a certain

university, 25% of the female teenagers aged 13 – 19 whose family belong to poverty
level got married at the age of 17. To validate this claim, another group of researchers got
a random sample of 250 female teenagers aged 13 – 19 years old whose family belong to
poverty level, and 55 of them got married at the age of 17. Is there enough evidence that
the proportion of female teenagers aged 13 – 19 got married at the age of 17? Test at α =
0.05.
 Solution

Given that population proportion p=0.25

Number of female teenagers aged 18-19 years old whose family belongs to
poverty level and got married at the age of 17.
x=55, n=250
∝=0.05 Level of significance

Hypothesis
Ho: p=0.25, Ha= p ≠ 0.25

Calculations
x 55
Sample proportion p= = =0.22
n 250
Condition check:
(i)
(ii)
P Approximately normal

SD=
√ p ( 1− p ) = √ 0.25 x 0.75 =0.02738
n 250

Test statistics
ṗ− p
z= N ( 0,1 )
P ( 1−P )

z=
√ ¿
n
0.22−0.25
¿

0.02738
z=−1.09569
lzl=1.09569
 p−value
p(z >lzl)=1− p( z <l1.09569 l)
¿ 1−[P ( z <1.1 ) – P ( z ≤−1.1 ) ]
¿ 1−(0.86433−0.13567)
P( z >l 2l)=0.27134
p−value=0.27136
Decision Rules
If p−value>∝ then we fail to reject Ho.
Conclusion
Fails to reject Ho, there is sufficient evidence at ∝=0.05 level of
significance to claim that the proportion of female teenagers aged 13-19
got married at the age of 17.

1.5. An economist claims that the mean monthly family income of a family that belongs to
poverty level is Php11,500.00. A group of researchers gets a sample of 100 families living
within the squatter area of RL City. Assuming that their salaries are normally distributed
with mean monthly income of Php12,750.00 with a standard deviation of Php125.00, test
the claim at α = 0.01.
Solution:
Given:
μ=11,555
ẋ = 12,750
𝑠 = 125
𝑎 = 0.01

Step 1: State the hypotheses

𝐻𝑜: The mean monthly family income of a family is Php11, 500.
𝐻₁: The mean family income of a family is greater than Php11, 500.

Step 2: Set the criteria for a decision (𝒂)

𝑎=0.01

Step 3: Select and compute the approximate test statistics when it is not stated in the
problem.

Use the t-test because the sample standard deviation is given and 𝑛=100

Solution:

𝑡=ẋ−𝜇𝑠𝑛=12,750−11,500125100=1,25012.5=100

Step 4: Make a decision. Compare the value of the test statistics and the critical value
obtained from .

The critical value of 𝑧=1.645 at 𝑎=0.01 and the computed value of 𝑧=100.

1.6. Suppose that a researcher interviews 500 new registered voters who will vote for the
2016 Presidential elections. Out of 500 new voters, 270 of them will vote for a candidate
 with a good program for education and environment. Is there a sufficient piece of
evidence that suggests a candidate with good program for education and environment will
win the presidential elections? Test at 0.05 level of significance.
The sample size is N=500, the number of the favourable cases is X=270, and the sample
X 270
proportion is ρ= = =0.54 , and the significance level is a 0.05
N 500

Null And Alternative Hypotheses

Ho: ρ=≤0.5
Hα : ρ> 0.5

This corresponds to a right-tailed test, for which a z-test for one population proportion
needs to be used.

Rejection Region
Based on the information provided, the significance level isα =0.05, and critical
value for a right-tailed test is Zc=1.64 .
The rejection region for this right-tailed test is R={ z : z >1.64 }

Test Statistics
The z-statistics is computed as follows:
P−Po 0.54−0.5
z= = =1.789
√ Po ( 1− po ) /n 0.5 (1−0.5 )
√ 500

Decision about the null hypothesis

Since it is observe that z=1.789> Zc=1.64, it is then concluded that the null
hypothesis is rejected.
Using the P-value approach: The p-value is ᵖ=0.0368, and since ᵖ=0.368<0.05, it is
concluded that the null hypothesis is rejected.

Conclusion
It is concluded that the null hypothesis Ho is rejected. Therefore, there is enough
evidence to claim that the population proportion p is greater than ρσ , at the α =0.05
significance level.

1.7. The following hypotheses are given:

H o : ẋ1 = ẋ2
H o : ẋ 1 ≠ ẋ2
A group of marketing students from the University of Excellence conducted a research
on the perception of consumers about XYZ product in two different places. A random sample
of 88 respondents from the first group was found out to have a sample mean of 90 with
standard deviation of 7.5. A random sample of 112 respondents from the second group was
found out to have a sample mean of 92 with a standard deviation of 12.5. At 0.01 level of
significance, is there a significant difference between the two means?

Solution:
Step 1: Stating the Hypothesis.
 H o : ẋ1 = ẋ2
H o : ẋ 1 ≠ ẋ2
Step 2: Set the criteria for a decision (a ¿.
a=0.01

Step 3: Select and compute the appropriate test statistic when it is not stated in the
problem.
Use z-test of two means and utilize two-tailed test since the alternative
hypothesis is non-direction.
ẋ ₁−ẋ ₂
t=
s ₁² s ₂²
√ +
n1 n2
90−92
t=
7.5 12.5
√ +
88 112
−2
t=
√ 0.1968
−2
t=
0.4437
t=−4.5076

Step 4: Make a decision.

The critical value of z=-1.645 at a=0.01 and the computed value of z= -4.5076.
Reject the null hypothesis because the computed value of z=-4.731 lies at the
rejection region. There is a significance difference between the two sample
means.