Question: Question # 1

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

a) Is this an upper tail, lower tail, or two-tail test? (4 points)

b) Are we testing means or proportions? (4 points)

c) State the rule of rejection (in terms of p-value and level of significance) (4 points)

d) Find the p-value (4 points)

e) Should you reject or not reject H_O? (4 points)

f) Does the result suggest that fewer job applicants now use drugs? (4 points)