Question

An article in the Nov. 11, 2005, issue of the San Luis Obispo Tribune reported that researchers making random purchases at California Wal-Mart stores found scanners coming up with the wrong price 8.3% of the time. Suppose this was based on 200 purchases. The National Institute for Standard and Technology says that in the long run at most two out of every 100 items should have incorrectly scanned prices.
a. Develop a test procedure with a significance level of (approximately) .05, and then carry out the test to decide whether the NIST benchmark is not satisfied.

b. For the test procedure you employed in (a), what is the probability of deciding that the NIST benchmark has been satisfied when in fact the mistake rate is 5%?

Answer 1

Answer:

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