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In: Statistics and Probability

Ads A company is willing to renew its advertising contract with a local radio station only...

Ads A company is willing to renew its advertising contract with a local radio station only if the station can prove that more than 20% of the residents of the city have heard the ad and recognize the company’s product. The radio station conducts a random phone survey of 400 people. a. What are the hypotheses? b. The station plans to conduct this test using a 10% level of significance, but the company wants the significance level lowered to 5%. Why? c. For which of the two levels of significance will the power of this test be higher? Why? d. They finally agree to use α = .05, but the company proposes that the station call 600 people instead of the 400 originally proposed. Will that make the risk of an acceptance error higher or lower? Explain. Testing the ads. The company contacts 600 people selected at random, and only 133 remember the ad. e. Calculate a 95% confidence interval for the proportion of all residents who remember the ad. f. Calculate the P-value for testing the hypotheses given in the last question. g. Should the company renew the contract? Use the confidence interval and P-value to justify your conclusion.

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orchestra answered 2 years ago
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