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Power theory
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Easy


Suppose that you have two coins $A$ and $B$ in an urn. Coin $A$ has probability of heads equal to $0.5$, and coin $B$ has probability of heads equal to $0.7$. You pick a coin from the urn blind-folded. You now toss it $10$ times and record the number of heads. To check if coin $A$ was chosen, you want to set up a hypothesis test by rejecting the null if the number of heads exceeds some constant.

(a)What would your rejection criterion be for a $1%$ significance level.
(b) Compute the power of the test.

(You may use a calculator or a Binomial table)

Answer:

no of heads $>9$, $0.02825$