ESS210B
Prof. Jin-Yi Yu
Example
qA manufacturer of sports equipment has developed a new fishing line that he claims has a mean breaking strength of 8 kilograms with a standard deviation of 0.5 kilogram. Test the hypothesis that  m = 8 kilograms against the alternative that m ¹ 8 kilograms if a random sample of 50 lines is tested and found to have a mean breaking strength of 7.8 kilogram. Use a 0.01 level of significance.
Answer:
       1.  a = 0.01
       2.  H0: m = 8 kilograms
            H1: m ¹ 8 kilograms
       3.  Use Z statistics (because sample mean has a normal distribution)
       4.  Critical region: Z-a/2 < -2.58 and Za/2 > 2.58
       5.  Z = (7.8-8)/0.5/(50)0.5 = -2.828 < Z-a/2 
       6. Reject H0 and conclude that  the average breaking strength is not equal to 8
           but, in fact, less than 8 kilograms.