You are in charge of shipping computers to customers. You learn that a faulty RAM chip was put into some of the machines. There’s a simple test you can perform, but it’s not perfect. All but 4% of the time, a good chip passes the test, but unfortunately, 35% of the bad chips pass the test, too. You have to decide on the basis of one test whether the chip is good or bad. Make this a hypothesis test.
a) What are the null and alternative hypotheses?
b) Given that a computer fails the test, what would you decide? What if it passes the test? c) How large is a for this test?
d) What is the power of this test?