Question:

In 1990, 5.8% of job applicants who were tested for drugs failed the test.

A random sample of 1440 current job applicants results in 61 failures ( based loosely on data from the American Management Association ).

At the  = 0.01 significance level, test the below claim ( i.e., that the failure rate is now lower )

H _O : p = 0.058

H _A : p < 0.058

1. Is this an upper tail , lower tail , or two-tail test? (4 points)
2. Are we testing means or proportions? (4 points)
3. State the rule of rejection (in terms of p-value and level of significance) (4 points)
4. Find the p-value (4 points)
5. Should you reject or not reject H _O ? (4 points)
6. Does the result suggest that fewer job applicants now use drugs? (4 points)

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Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document