A drug company is testing a drug intended to increase heart rate. A sample of 100 yielded a mean increase of 1.4 beats per minute, with a population standard deviation known to be 3.6. Since the company wants to avoid marketing an ineffective drug, it proposes a 0.001 significance level.
A drug company is testing a drug intended to increase heart rate. A sample of 100
100
yielded a mean increase of 1.4
1.4
beats per minute, with a population standard deviation known to be 3.6
3.6
. Since the company wants to avoid marketing an ineffective drug, it proposes a 0.001
0.001
significance level. Should it market the drug? (Hint: If the drug doesn't work, the increase will be zero.)
(a) Describe an appropriate null hypothesis, alternative hypothesis.
(b) Calculate the test statistic and P
P
-value
(c) What are your conclusions? Should the company market the drug? Explain.
The population standard deviation is known. We will use the z-test statistic to calculate the test statistic value and the P-value. An excel function, NOMRDIST() is used for the P-value at the one-tailed.
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Given that,
Sample size, n
=
100
n=100
Sample mean, ¯
x
=
1.4
x¯=1.4
Population standard deviation, σ
=
3.6
σ=3.6
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