Question

1. (6 pts) A marketing firm claimed that its clients receive more internet traffic to their websites than other companies (that are not the firm’s clients). Before hiring the marketing firm, you decide to test their claim. So you gathered data from a random sample of the firm’s clients and a random sample of non-clients. Sure enough, the mean daily traffic to the clients’ sites was significantly higher than the nonclients’ traffic, with a p-value of 0.03. So you reject the null hypothesis and hire the firm. What would it mean to commit a Type I error in this context? Is there a chance that you are committing a Type I error in this situation? (If so, what is the probability that you are committing a Type I error?)   

Answer 1

Ans:- A type I error is the rejection of a true null hypothesis. In this case, it means the null hypothesis is correct which implies the claim of the marketing firm that its clients receive more internet traffic to their websites than other companies is wrong and yet we hire the firm.

The Probability that you are commiting a Type 1 error is equal to the significance level. In this case since Alpha level is not mentioned, we can say that probability of committing a Type 1 error is atleast 0.3