Options for drop down menu are above or equal to or below The crisis in the real

Question

Options for drop down menu are above or equal to or below

The crisis in the real estate market caused the listing prices of homes in certain areas to fall from previous years. A real estate office would like to sample 54 new listings randomly to test the hypothesis that the current listing price average is less than $244,000, the average in the previous year. Assume the standard deviation for the price of homes in this market is $46,000. Complete parts a through d below. a. Explain how Type I and Type II errors can occur in this hypothesis test. A Type I error can occur if the average listing price is $244,000 and the null hypothesis is rejected. A Type II error can occur if the average listing price is $244,000 and the null hypothesis is not rejected.

Explanation / Answer

Answer -

A type 1 error can occur if the average listing price is equal to $244,000 and the null hypothesis is rejected.

A type 2 error can occur if the average listing price is below $244,000 and the null hypothesis is not rejected.

Explanation -

A type 1 error is the incorrect rejection of the null hypothesis that is true.

And a type 2 error is incorrectly retaining the null hypothesis that is false.

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