Question

In a study of 794 randomly selected medical malpractice​lawsuits, it was found that 490 of them were dropped or dismissed. Use a 0.050 significance level to test the claim that most medical malpractice lawsuits are dropped or dismissed.

What is the test statistic

Answer 1

Given that in a study of n = 794 randomly selected medical malpractice​lawsuits, it was found that X = 490 of them were dropped or dismissed.

so, the sample proportion would be:

based on the claim given the hypotheses are:

Based on the hypothesis it will be a right-tailed test.

Test statistic:

Rejection region:

based on the type of hypothesis and given significance level the critical value for rejection region is computed using excel formula for normal distribution which is =NORM.S.INV(0.05), thus the Zc is computed as =1.645

So, reject Ho if Z >Zc

Conclusion:

Since Z >>Zc hence we can reject the null hypothesis and conclude that there is sufficient evidence to support the claim that most medical malpractice lawsuits are dropped or dismissed.