1. Chapter 9: Hypothesis Testing Section 3: The P-Value in Hypothesis Testing

2. Example A credit card company has lowered its annual interest rate. Records from before the rate change show the average outstanding balance on credit card accounts to be = $576. The managers believe that reducing interest rates spurs greater use of credit cards, which results in higher outstanding balances. To test this claim, a random sample of 36 accounts was examined 6 months after the interest rate reduction. The average outstanding balance was = $615 with standard deviation s = $120. Test the managers’ claim at the 5% and 1% level of significance. What is the smallest level of significance at which the sample data will tell us to reject H o ?

3. Example A consumer group suspected than an insecticide was effective for less than the advertised 12 days, on the average. The group used a random sample of 36 and obtained a mean of 11.25 and a standard deviation of 3 days. Use a 5% level of significance. Find the P-value.

4. Example A construction company figures the cost of a project based an average idle time of 68 minutes per worker per shift. A new work schedule has been completed. To determine if the new schedule changes the average idle time, a random sample of 49 workers was observed during a shift. The average idle time was 68 minutes with standard deviation 10 minutes. Use a 5% level of significance. Use the P-value of the sample statistic to make the decision.