Question

Suppose 202 202 subjects are treated with a drug that is used to treat pain and 50 50 of them developed nausea. Use a 0.05 0.05 significance level to test the claim that more than 20 20​% of users develop nausea.

Answer 1

Proportion (p0) = 0.20

Total number of sample (n) = 202

number of favourable events (X) = 50

We are interested in testing the hypothesis

Since, the test is two-tail test at = 0.05

Decision Rule: Reject the null hypothesis if the test statistic value is greater than the critical value 1.64

The statistic value, 1.6886 is greater than the critical value 1.64. Hence, reject the null hypothesis.

There is significant evidence to claim that more than 20 20​% of users develop nausea.