17-) A health insurer has determined that the \"reasonable and customary fee for

Question

17-) A health insurer has determined that the "reasonable and customary fee for a cortain medical procedure is $ 1200. They suspect that the averrage fee charged by one particular clinic for this procedure is different than $ 1200. The insurer wants to perform a hypothesis test to determine whether their suspicion is correct. The hypotheses are: Ho : ? 1200 H, : ? 1200 Suppose that the results of the sampling lead to rejection of the null hypothesis. Classify that conclusion as a Type I error, a Type II error, or a correct decision, if in fact the average fee charged by the clinic is $ 1200. (a) Correct decision (b) Type II error (c) Type I error

Explanation / Answer

Ans:

When the null hypothesis is true and you reject it, you make a type I error.

In above case,null hypothesis is true i.e. average fee is in fact equal to 1200,but we reject the null hypothesis.

So,the correct option is c(Type I error)

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