Chapter 8.4, Problem 48E

With domestic sources of building supplies running low several years ago, roughly 60,000 homes were built with imported Chinese drywall. According to the article “Report Links Chinese Drywall to Home Problems” (New York Times, Nov. 24, 2009), federal investigators identified a strong association between chemicals in the drywall and electrical problems, and there is also strong evidence of respiratory difficulties due to the emission of hydrogen sulfide gas. An extensive examination of 51 homes found that 41 had such problems. Suppose these 51 were randomly sampled from the population of all homes having Chinese drywall.

1. a. Does the data provide strong evidence for concluding that more than 50% of all homes with Chinese drywall have electrical/environmental problems? Carry out a test of hypotheses using α = .01.
2. b. Calculate a lower confidence bound using a confidence level of 99% for the percentage of all such homes that have electrical/environmental problems.
3. c. If it is actually the case that 80% of all such homes have problems, how likely is it that the test of (a) would not conclude that more than 50% do?