METHODS OF DATA ANALYSIS
DECISION MAKING WITH HYPOTHESIS TESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Critical values
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Critical region
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Type II error
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Level of significance
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Detailed explanation-1: -To find the critical value, you start with the significance level of your hypothesis test. Your significance level is equal to the total area of the rejection region. For example, with a 0.05 significance level, the entire rejection region will be equal to 5% of the area under the normal distribution.
Detailed explanation-2: -In a test of hypothesis, a critical value is a number that separates two regions: the critical region, that is, the set of values of the test statistic that lead to a rejection of the null hypothesis; the acceptance region, that is, the set of values for which the null is not rejected.
Detailed explanation-3: -➢ To determine the critical region for a normal distribution, we use the table for the standard normal distribution. If the level of significance is = 0.10, then for a one tailed test the critical region is below z =-1.28 or above z = 1.28.