8. Two different companies (A and B) have applied to provide cable television ser- vice in a certain region. Let p denote the proportion of all potential subscribers who favor the company A over the company B based on a random sample of 25 individuals. Consider the case that company A wants to increase its produc- tion. Let the test statistic X be the number in the sample who favor the first company and x represent the observed value of X and a = 0.05. 8.1. What are the appropriate null and alternative hypotheses? Describe the two types of errors that company A might make. Identify which is a Type I error and which is a Type II error. Which one is more 8.2. serious. If we reject Ho for X > 8, calculate the probability of making type II error for p = 0.75. [Use the table given for exact value] 8.3.

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8. Two different companies (A and B) have applied to provide cable television ser-
vice in a certain region. Let p denote the proportion of all potential subscribers
who favor the company A over the company B based on a random sample of 25
individuals. Consider the case that company A wants to increase its produc-
tion. Let the test statistic X be the number in the sample who favor the first
company and x represent the observed value of X and a = 0.05.
8.1. What are the appropriate null and alternative hypotheses?
8.2. Describe the two types of errors that company A might make. Identify
which is a Type I error and which is a Type II error. Which one is more
serious.
If we reject Ho for X > 8, calculate the probability of making type II error
for p = 0.75. [Use the table given for exact value]
8.3.
Transcribed Image Text:8. Two different companies (A and B) have applied to provide cable television ser- vice in a certain region. Let p denote the proportion of all potential subscribers who favor the company A over the company B based on a random sample of 25 individuals. Consider the case that company A wants to increase its produc- tion. Let the test statistic X be the number in the sample who favor the first company and x represent the observed value of X and a = 0.05. 8.1. What are the appropriate null and alternative hypotheses? 8.2. Describe the two types of errors that company A might make. Identify which is a Type I error and which is a Type II error. Which one is more serious. If we reject Ho for X > 8, calculate the probability of making type II error for p = 0.75. [Use the table given for exact value] 8.3.
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