Question: 73 One of the biggest issues facing e-retailers is the ability to reduce the proportion of customers who cancel their transactions after they have selected their products. It has been estimated that about half of prospective customers cancel their transactions after they have selected their products. Suppose that a company changed its web site so that customer could use a single-page checkout process rather than multiple pages. A sample of 500 customers who had selected their products was provided with the new checkout system. Of these 500 customers, 210 cancelled their transactions after they have selected their products.

a. At the 0.01 level of significance, is there evidence that the proportion of customers who selected products and then cancelled their transaction was less than 0.50 with the new system?

b. Suppose that a sample of 100 customers who had selected their products were provided with the new checkout system and that 42 of those customers cancelled their transactions after they had selected their products. At the 0.01 level of significance, is there evidence that the proportion of customers who selected products and then cancelled their transaction was less than 0.50 with the new system?

c. Compare the results of (a) and (b) and discuss the effect that sample size has on the outcome, and, in general, in hypothesis testing.