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Significance level of a drug efficacy test on 20 patients

Question

A drugmaker says its treatment improves focus in 80%80\% of patients with attention deficit disorder. A regulator suspects this is too high, gives the drug to 2020 patients, and counts the number XX who respond, testing H0:p=0.8H_0:p=0.8 against Ha:p<0.8H_a:p<0.8 and rejecting when X≤12X\le12. What is the significance level α\alpha?

Short answer

About 0.0320.032. The significance level is the chance of landing in the rejection region when H0H_0 holds: P(X≤12)\mathbb{P}(X\le12) for X∼Bin(20,0.8)X\sim\text{Bin}(20,0.8), which is approximately 0.03210.0321.

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