Problem 4BSC

Notation What does the notation za indicate?

Answer:

Step 1:

is the value for which the area underneath the standard normal curve to the right of the value is equal to ‘’.

The z-score needed to reject is called the critical value for significance. The critical value depends on the significance level, which we state as α.

Each type of alternative hypothesis has it’s own critical values:

- "One-sided left-tailed test.
- "One-sided right-tailed test.
- "Two-sided test.

- Significance level of 0.05 "One-sided left-tailed test

:μ<μ0

Critical value is z = -1.645.

2). Significance level of 0.05 "One-sided right-tailed test

:μ>μ0

Critical value is z =1.645.

3). Significance level of 0.05 "Two-sided test

:μ≠μ0 (two critical values)

Critical values are z = -1.96 and z =1.96.