Question: Dropouts, part II. Initially, 203 students signed up for the Stats course in Exercise. They used the software suggested by the salesman, and only 11 dropped out of the course.

a) Should the professor spend the money for this software? Support your recommendation with an appropriate test.

b) Explain carefully what your P-value means in this context.

Exercise: Dropouts. A Statistics professor has observed that for several years about 13% of the students who initially enroll in his Introductory Statistics course withdraw before the end of the semester. A salesman suggests that he try a statistics software package that gets students more involved with computers, predicting that it will cut the dropout rate. The software is expensive, and the salesman offers to let the professor use it for a semester to see if the dropout rate goes down significantly. The professor will have to pay for the software only if he chooses to continue using it.

a) Is this a one-tailed or two-tailed test? Explain.

b) Write the null and alternative hypotheses.

c) In this context, explain what would happen if the professor makes a Type I error.

d) In this context, explain what would happen if the professor makes a Type II error.

e) What is meant by the power of this test?