State the rule of rejection


In 1990, 5.8% of job applicants who were tested for drugs failed the test. A random sample of 1440 current job applicants results in 61 failures (based loosely on data from the American Management Association).

At the α = 0.01 significance level, test the below claim (i.e., that the failure rate is now lower)

HO: p = 0.058
HA: p < 0.058

c) State the rule of rejection (in terms of p-value and level of significance)

d) Find the p-value
e) Should you reject or not reject HO?
f) Does the result suggest that fewer job applicants now use drugs?

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Basic Statistics: State the rule of rejection
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