A Survey Claims That 9 Out of 10 Doctors Recommend

question 48

Multiple Choice

A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this claim against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a random sample of 100 doctors was selected. Suppose that the test statistic is -2.20. Can we conclude that H₀ should be rejected at the (a) α = 0.10, (b) α = 0.05, and (c) α = 0.01 level of Type I error?

• A) (a) yes; (b) yes; (c) yes
• B) (a) no; (b) no; (c) no
• C) (a) no; (b) no; (c) yes
• D) (a) yes; (b) yes; (c) no

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Definitions:

Oligopoly

A market structure characterized by a small number of firms that have significant market power, leading to limited competition.

Price Fixing

An illegal practice where businesses collude to set prices at a certain level, rather than allowing market forces to determine them.

Microsoft

A multinational corporation that specializes in the development, manufacturing, licensing, support, and sales of computer software, consumer electronics, and personal computers and services.

Antitrust Policy

Regulations and laws that encourage competition by limiting monopolies, preventing mergers that would restrict competition, and other business practices that would reduce consumer welfare.