Test decisions and errors

Problem

A two-sided test rejects H0H_0 when Z>1.96|Z|>1.96. For an observed Z=2.3Z=2.3, state the decision and relate the rule to p-values, Type I error, Type II error, and power. Separately, compute the Pearson chi-square statistic for observed counts (30,20)(30,20) against expected counts (25,25)(25,25), give its degrees of freedom, and state what a likelihood-ratio test compares.

Reveal answer or reference solution

Reject H0H_0; the two-sided p-value is below 0.050.05. The rule has Type I error 0.050.05 under its assumptions. Type II error is failure to reject under a particular alternative, and power is one minus that error probability.

The chi-square statistic is

(3025)225+(2025)225=2,\frac{(30-25)^2}{25} + \frac{(20-25)^2}{25} = 2,

with one degree of freedom. A likelihood-ratio test compares the best likelihood under the null with the best likelihood under the larger alternative model.

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