Question

Duke Energy reported that the cost of electricity for an efficient home in a particular neighborhood of Cincinnati, Ohio, was $104 per month. A researcher believes that the cost of electricity for a comparable neighborhood in Chicago, Illinois, is higher. A sample of homes in this Chicago neighborhood will be taken and the sample mean monthly cost of electricity will be used to test the following null and alternative hypotheses. H0: μ ≤ 104 Ha: μ > 104 (a) Assume the sample data lead to rejection of the null hypothesis. What would be your conclusion about the cost of electricity in the Chicago neighborhood? The input in the box below will not be graded, but may be reviewed and considered by your instructor. (b) What is the Type I error in this situation? The Type I error is - Select your answer - H0 when it is true. What are the consequences of making this error? The input in the box below will not be graded, but may be reviewed and considered by your instructor. (c) What is the Type II error in this situation? The Type II error is - Select your answer - H0 when it is false. What are the consequences of making this error?

Answer 1

Answer:

Step-by-step explanation:

a. H0: μ ≤ 104 Ha: μ > 104

Assuming the data leads to the rejection of the null hypothesis, we would conclude that there is no sufficient statistical evidence to prove that the cost of electricity for an efficient home in a particular neighborhood of Cincinnati, Ohio, was $104 per month.

b. The type error in this situation would be rejecting the null hypothesis when it is actually true. Rejecting the fact that the cost of electricity for an efficient home in a particular neighborhood of Cincinnati, Ohio, was $104 per month when it was actually true.

c. Type II error in this case would be failing to reject the null when it is false. Failing to reject the fact that the cost of electricity for an efficient home in a particular neighborhood of Cincinnati, Ohio, was $104 per month when it is actually not true.

The consequences for these errors might be disastrous including sueing of the accuser party etc.