A Company Manufacturing Computer Chips Finds That 8% of All

question 20

Essay

A company manufacturing computer chips finds that 8% of all chips manufactured are
defective. Management is concerned that high employee turnover is partially responsible
for the high defect rate. In an effort to decrease the percentage of defective chips,
management decides to provide additional training to those employees hired within the
last year. After training was implemented, a sample of 450 chips revealed only 27
defects. Was the additional training effective in lowering the defect rate?
A. Write the null and alternative hypotheses.
b. What is the value of the test statistic?
c. What is the associated P-value?
d. State your conclusion using α = 0.01.

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Definitions:

Marginal Social Cost

The total cost incurred by society when the production of a good or service is increased by one additional unit, including both private and external costs.

Common Resources

Goods that are non-excludable and rivalrous, meaning they are available to all but can be depleted by overuse.

Marginal Social Cost

This refers to the entire cost society bears for the production of an additional unit of a good, including both private costs borne by producers and external costs absorbed by others.

Common Resource

A resource like air or water that is non-excludable and rivalrous, meaning it's difficult to prevent anyone from using it, and one person's use diminishes others' use.