Question

A large restaurant is being sued for age discrimination because 15% of newly hired candidates are between the ages of 30 years and 50 years when 50% of all applicants were in that age bracket. You plan to use hypothesis testing to determine whether there is significant evidence that the company's hiring practices are discriminatory.

Part A: State the null and alternative hypotheses for the significance test. (2 points)

Part B: In the context of the problem, what would a Type I error be? A Type II error? (2 points)

Part C: If the hypothesis is tested at a 1% level of significance instead of 5%, how will this affect the power of the test? (3 points)

Part D: If the hypothesis is tested based on the hiring of 1,000 employees rather than 100 employees, how will this affect the power of the test?

Answer 1

a)

Ho: company's hiring practices are not discriminatory.

Ha: company's hiring practices are discriminatory.

b)

type I error is concluding that company's hiring practices are discriminatory. while in actual company's hiring practices are not discriminatory.

Type II error is concluding that company's hiring practices are not discriminatory while in actual company's hiring practices are discriminatory.

c) power of test will decrease

.d) Larger the sample size,greater the power      

so, power of test will increase