A pharmaceutical manufacturer wants to decide whether a prop

  A pharmaceutical manufacturer wants to decide whether a proportion of 90% of all the patients given a medication will stand the chance of recovering. His hypothesis is H₀ : = 0.85 versus H₁ : = 0.55. Based on a sample of  n = 10 trials (i.e. number of patients treated) his test statistic is X, the number of successful recoveries. His decision rule (test) is that he will accept H₀ if  X 9, otherwise he will conclude that H₁ : = 0.55 is true. Without actually computing the final values find by just formulating the formulas:

a) the significance level

b)         the power of the test.

Solution