Type II error and power at an alternative

Problem

Continue with a one-sided zz-test whose rejection rule is Xˉ>1.645\bar X>1.645 and whose sampling standard error is 11. Under H0:μ=0H_0:\mu=0, state the Type I error probability. At the alternative μ=2\mu=2, compute the Type II error probability and power.

Reveal answer or reference solution

The cutoff was chosen so that under H0H_0, P0(Xˉ>1.645)=0.05P_0(\bar X>1.645)=0.05; this is the Type I error probability. Under μ=2\mu=2,

β=P2(Xˉ≤1.645)=Φ(1.645−2)=Φ(−0.355)≈0.3613\beta=P_2(\bar X\le1.645)=\Phi(1.645-2)=\Phi(-0.355)\approx0.3613

Therefore the power is

1−β=Φ(0.355)≈0.63871-\beta=\Phi(0.355)\approx0.6387
Outcome

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