Important Note: Unlike what I instruct in my book, make sure that you compute a P-value every single time that you perform a hypothesis test. They have decided to not teach about critical values this term, so there is no need to use
Table D to get z* or t*, the critical value, for any hypothesis test. (You will, of course, still use z* or t* for confidence intervals.)
Because you are not using critical values, it therefore becomes essential to compute a P-value.
Your five steps to test a hypothesis should now always be:
- State the Hypotheses and so
establish whether the test is upper-tailed, lower-tailed, or two-tailed.
- State the given level of significance, alpha. Let alpha = 5% if none is given.
- Compute the test statistic using the correct formula for z or t.
- Compute the P-value by marking the test statistic on a bell curve and shading the appropriate region according to your alternative
hypothesis.
- State your conclusion knowing that you always reject Ho if the P-value < alpha.
