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Multiple Choice
A cereal company advertises that of households purchase its brand every month. A market research team wonders if the true proportion is different, so they survey households, and report that they purchase the brand at least once per month. Based on the research, should the company change its advertising?
A
Yes, the claim is false.
B
No, the claim is true.
C
More info is required.
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Verified step by step guidance
1
Identify the null hypothesis (H_0) and the alternative hypothesis (H_a). Here, H_0: p = 0.50 (the proportion of households purchasing the brand is 50%), and H_a: p \neq 0.50 (the proportion is different from 50%).
Calculate the sample proportion \( \hat{p} \) using the survey data: \( \hat{p} = \frac{114}{200} \).
Compute the standard error (SE) of the sample proportion under the null hypothesis using the formula: \[ SE = \sqrt{\frac{p(1-p)}{n}} \] where \( p = 0.50 \) and \( n = 200 \).
Calculate the test statistic (z) using the formula: \[ z = \frac{\hat{p} - p}{SE} \]. This measures how many standard errors the sample proportion is away from the hypothesized proportion.
Determine the p-value corresponding to the calculated z-value for a two-tailed test. Compare the p-value to the significance level (commonly 0.05) to decide whether to reject H_0. If rejected, the company should consider changing its advertising; if not, no change is needed.