Question

We would like to test the claim that the mean cost for an Elementary Statistics Textbook is greater than $130.

This teacher used the correct formulas. However, she cannot make the claim that the computer simulation improves the students' scores.

What are the null and alternative hypotheses in this problem?

Identify the Type I and Type II errors for this hypothesis test. (Really having difficulty with this part of the question)

Answer 1

The null and the alternative hypothesis are

Where

Since type I error is the rejection of a true null hypothesis, while a type II error is failing to reject a false null hypothesis.

Here if the average cost of book is 130, but due to sampling error will reject it and conclude that cost is greater than 130.

So type 1 error is concluding that average cost greater than 130 but actually the average cost is 130.

Type 2 error is concluding that average cost 130, but actually its greater than 130