A Maker of Toothpaste Is Interested in Testing Whether the Proportion

question 54

Essay

A maker of toothpaste is interested in testing whether the proportion of adults (over age 18) who use its toothpaste and have no cavities within a six-month period is any different from the proportion of children (18 and under) who use the toothpaste and have no cavities within a six-month period. To test this, it has selected a sample of adults and a sample of children randomly from the population of those customers who use their toothpaste. The following results were observed. Based on these sample data and using a significance level of 0.05, what conclusion should be reached? Use the p-value approach to conduct the test.

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold against deposits, as mandated by central banking authorities.

Money Supply

The all-encompassing amount of economic monetary assets at a designated time.

Reserve Requirements

Central bank regulations setting the minimum amount of reserves that must be held by a commercial bank.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the Federal Reserve's discount window.