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Q10Section A (Section A)10 of 35

Critical value of the most powerful test for a Pareto-type density

Let XX be a random variable of continuous type with probability density function

f(x∣θ)={θx(3x)θ,x>3, 0,otherwise,θ>0.f(x|\theta)=\begin{cases}\dfrac\theta x\left(\dfrac3x\right)^\theta, & x>3,\ 0, & \text{otherwise,}\end{cases}\quad\theta>0.

Based on single observation XX, the most powerful test of size α=0.1\alpha=0.1, for testing H0:θ=1H_0:\theta=1 against H1:θ=2H_1:\theta=2, rejects H0H_0 if X<kX<k. Then the value of kk is

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