1.In a study of air-bag effectiveness it was found that in 821 crashes of midsize cars equipped with air bags, 46 of the crashes resulted in hospitalization of the drivers (based on data from the highway Loss Data Institute). Using a 0.01 significance level, you need to test the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts. What conclusion should you make?

a.Because the test statistic is -2.35 with critical value -2.58, we fail to reject H₀ and conclude there is not sufficient evidence to support the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts.

b.Because the test statistic is -2.35 with critical value -2.33, we fail to reject H₀ and conclude there is not sufficient evidence to support the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts.

c.Because the test statistic is -2.35 with critical value -2.33, we reject H₀ and conclude there is sufficient evidence to support the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts.

d.Because the test statistic is -2.74 with critical value -2.33, we fail to reject H₀ and conclude there is not sufficient evidence to support the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts.

e.Because the test statistic is -2.74 with critical value -2.33, we reject H₀ and conclude there is sufficient evidence to support the claim that the air-bag hospitalization rate is lower than the 7.8% rate for crashes of mid-size cars equipped with automatic safety belts.