# solution

Reconsider the exercise in Section 5.1 about Medicare audits
(5.1.6). Of the 30 small claims, 14 were judged to be overpayments; of the 30
medium claims, 8 were judged to be overpayments. Our research question is this:
â€œDoes the chance that the claim is judged to be an overpayment tend to differ
by the size of the claim?â€

a. Which of the following is the appropriate null
hypothesis? Choose one.

Â A. Small claims are more likely to be judged overpayments
compared to medium claims.

B. Small claims are less likely to be judged overpayments
compared to medium claims.

C. Small and medium claims are equally likely to be judged
overpayments.

Â D. Small and medium claims are not equally likely to be
judged overpayments.

Â b. Which of the following is the appropriate alternative
hypothesis? Choose one.

A. Small claims are more likely to be judged overpayments
compared to medium claims.

Â B. Small claims are less likely to be judged overpayments
compared to medium claims.

C. Small and medium claims are equally likely to be judged
overpayments.

Â D. Small and medium claims are not equally likely to be
judged overpayments.

Â c. In this context, which of the following is an (are)
appropriate statistic value(s) to compare small to medium claims? Choose all
that apply.

Â A. 14/60 âˆ’ 8/60 = 0.10

B. 14/30 âˆ’ 8/30 = 0.20

C. 14/22 âˆ’ 16/38 = 0.22

Â D. (14/30)/(8/30) = 1.75

Suppose that we want to use cards to carry out a
randomization test of the appropriate hypotheses. d. How many cards will we
need? Choose one.

A. 30

B. 52

C. 60

D. Doesnâ€™t matter

Â e. We need cards of two different colors. Letâ€™s say we
decide to use red and black cards. Which of the following is an appropriate
combination of red and black cards? Choose all that apply.

Â A. 14 red and 8 black

B. 30 red and 30 black

Â C. 22 red and 38 black

D. 38 red and 22 black f. You shuffle the stack of red and
black cards and deal them into two piles. How many cards should you place in
each pile? Why?

g. What statistic should you record after you have shuffled
and dealt the cards into two piles? (Hint: There is more than one correct

Â h. Suppose that you have repeated the shuffle-and-deal many
times and recorded the appropriate statistic every

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