Medical Malpractice: In a study of 1228 randomly selected medical malpractice lawsuits, it was found that 856 of them were dropped or dismissed. Use a 0.01 significance level to test the claim that most medical malpractice lawsuits are dropped or dismissed. Use the P-value approach.
Solution :
This hypothesis test is a two tailed test .
The null and alternative hypothesis is
H0 : p = 0.5
Ha : p 0.5
= x / n = 856 / 1228 = 0.6971
Test statistic = z
= - P0 / [P0 * (1 - P0 ) / n]
= 0.6971 - 0.5 / [(0.5 * 0.5) / 1228]
= 13.81
P-value = 0.000
= 0.01
P-value <
Reject the null hypothesis .
There is sufficient evidence to suggest that the claim that most medical malpractice
lawsuits are dropped or dismissed .
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