A quality control manager believes that there are too many defective light bulbs being produced, higher than the advertised rate. The manager's null hypothesis is that the production line of light bulbs has a defect rate of
p = 0.025 (the light bulb's stated defect rate). He does a hypothesis test with a significance level of 0.05. Symbolically, the null and alternative hypothesis are as follows:
H0: p = 0.025 and
Choose the statement that best describes the significance level in the context of the hypothesis test.
◦ The significance level of 0.05 is the test statistic that we will use to compare the observed outcome to the null hypothesis.
◦ The significance level of 0.05 is the defect rate we believe is the true defect rate.
◦ The significance level of 0.05 is the probability of concluding that the defect rate is equal to 0.025 when in fact it is greater than 0.025.
◦ The significance level of 0.05 is the probability of concluding that the defect rate is higher than 0.025 when in fact the defect rate is equal to 0.025.
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