Nexium is a drug that can be used to reduce the acid produced by the body and heal damage to the esophagus due to acid reflux. The manufacturer of Nexium claims that more than 94% of patients taking Nexium are healed within 8 weeks. In clinical trials, 213 of 224 patients suffering from acid reflux disease were healed after 8 weeks. Test the manufacturer's claim at the = 0.01 level of significance. (19 points)

Hypothesis Testing

STEP 1: DETERMINE THE NULL AND ALTERNATIVE HYPOTHESES.

STEP 2: STATE THE LEVEL OF SIGNIFICANCE.

CLASSICAL APPROACH VS P-VALUE APPROACH

STEP 3: COMPUTE THE TEST STATISTIC.

STEP 3: COMPUTE THE TEST STATISTIC.

STEP 4: DETERMINE THE CRITICAL VALUE.

STEP 4: DETERMINE THE P-VALUE.

STEP 5: COMPARE THE CRITICAL VALUE AND THE TEST STATISTIC AND STATE IF THE NULL HYPOTHESIS IS REJECTED OR NOT

REJECTED.

STEP 5: COMPARE THE P-VALUE AND ALPHA, THEN STATE IF THE NULL HYPOTHESIS IS REJECTED OR NOT REJECTED.

STEP 6: STATE THE CONCLUSION TO THE PROBLEM.

STEP 6: STATE THE CONCLUSION TO THE PROBLEM.