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# Hypothesis Testing Watch

1. Pleease help me solve this.

A new breakfast cereal is being test marketed in selected cities of
the east coast of the USA. Consumer panels are being used for the
evaluation in each of the selected cities. Past test marketing
experience has indicated that at least 76% of consumer panel
acceptance must be demonstrated before a product has a good chance
of being successful.
After 4 weeks of product use, the consumer reactions which have been
obtained are as follows:
Preferred Cereal or considered it as good as others- 468
Total Responses- 632
a) Using a 1% level of significance determine whether the
results indicate that the 76% criterion has been reached.
b) Suppose that it be known to the researchers, that the true
proportion of people in the population who prefer the cereal or who
think it is as good as others is actually 70%. What risk does the
test you have conducted in part(a) run of erroneously concluding
that a sample from this proportion could have come from a population
with a proportion of 0.76 or greater.
the true percentage is 74% instead of 70%? What does this imply
about the choice of the level of significance for the test?

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Updated: November 30, 2010
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