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StatisticsQ&A LibraryMedical Malpractice In a study of 1228 randomly selected medical malpractice lawsuits, it was found that 856 of them were dropped or dismissed (based on data from the Physicians Insurers Association of America). Use a 0.01 significance level to test the claim that there is a difference between the rate of medical malpractice lawsuits that go to trial and the rate of such lawsuits that are dropped or dismissed.Question

Asked Jan 17, 2020

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Medical Malpractice In a study of 1228 randomly selected medical malpractice lawsuits, it was found that 856 of them were dropped or dismissed (based on data from the Physicians Insurers Association of America). Use a 0.01 significance level to test the claim that there is a difference between the rate of medical malpractice lawsuits that go to trial and the rate of such lawsuits that are dropped or dismissed.

Step 1

The hypotheses are given below:

*Null hypothesis:*

H0: There is no difference between the rate of medical malpractice lawsuits that go to trial and the rate of such lawsuits that are dropped or dismissed.

*Alternative hypothesis:*

H1: There is a difference between the rate of medical malpractice lawsuits that go to trial and the rate of such lawsuits that are dropped or dismissed.

Step 2

*Test statistic:*

Here, 856 of 1,228 medical malpractice lawsuits were dropped or dismissed and 372(=1,228−856) lawsuits that go to trial. The level of significance is 0.01.

Then, the minimum value among 372 and 856 is 372. That is, x=372.

Here, the sample size 1,228 is greater than 25. Then, the test statistic *x* is to be converted into test statistic *z*.

The formula for calculating the test statistic *z* is,

Step 3

*Critical value:...*

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