2. Three years ago, the mean price of an existing single-family home was $243,72

Question

2. Three years ago, the mean price of an existing single-family home was $243,726. A real estate broker believes that existing home prices in her neighborhood are higher.

(a)

Determine the null and alternative hypotheses.

(b)

Explain what it would mean to make a Type I error.

(c)

Explain what it would mean to make a Type II error.

(a) State the hypotheses.

H0: __?___ ___?___ ___?___ (Type integers or decimals. Do not round. Do not include the $ symbol in your answer.)

H1 : __?__ ___?___ ___?__ (Type integers or decimals. Do not round. Do not include the $ symbol in your answer.)

Select; , , p

Select;

greater than>

equals=

less than<

not equals

(b) Which of the following is a Type I error? MULTIPLE CHOICE

A. The broker fails to reject the hypothesis that the mean price is $243,726 when the true mean price is greater than $243,726

B. The broker rejects the hypothesis that the mean price is $243,726 when it is the true mean cost.

C. The broker fails to reject the hypothesis that the mean price is $243,726 when it is the true mean cost.

D. The broker rejects the hypothesis that the mean price is $243 comma 726243,726,

when the true mean price is greater than $243,726.

(c) Which of the following is a Type II error? (multiple choice)

a. The broker rejects the hypothesis that the mean price is $243,726 when the true mean price is greater than $243,726.

B. The broker rejects the hypothesis that the mean price is $243,726, when it is the true mean cost.

C. The broker fails to reject the hypothesis that the mean price is $243,726, when the true mean price is greater than $243,726.

D. The broker fails to reject the hypothesis that the mean price is 243,726, when it is the true mean cost.

(a)

Determine the null and alternative hypotheses.

(b)

Explain what it would mean to make a Type I error.

(c)

Explain what it would mean to make a Type II error.

Explanation / Answer

(a) State the hypotheses.

H0: equal to$243,726 (=243726) (Type integers or decimals. Do not round. Do not include the $ symbol in your answer.)

H1 : greater than $243,726 (>243726) (Type integers or decimals. Do not round. Do not include the $ symbol in your answer.)

(b) B. The broker rejects the hypothesis that the mean price is $243,726 when it is the true mean cost.

Type I error is reject Null hypothesis when it is true

(c)C.The broker fails to reject the hypothesis that the mean price is $243,726, when the true mean price is greater than $243,726.

Type II error is accept H0 when it is false

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