Question

Three years​ ago, the mean price of an existing​ single-family home was ​$243 comma 772. 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

Answer 1

Answer:

(a)

$\mathbf{H_0: p=\ 243,772\\H_1: p$

(b)  The broker rejects the hypothesis that the mean price is $243,772, when it is the true mean cost.

(c) The broker fails to reject the hypothesis that the mean price is $243,772, when the true mean price is less than $243,772.

Step-by-step explanation:

(a) The null and alternative hypotheses are:

$H_0: p=\ 243,772\\H_1: p$

(b) The type I error says that reject the $H_0$ when it is true.

Thus, type I error is: The broker rejects the null hypothesis that the mean price of home is $243,772, when it is the true mean cost.

(c) The type II error says that accept the $H_0$ when it is false.

Thus, type II error is: The broker fails to reject the null hypothesis that the mean price of single-single home is $243,772, when the true mean price is less than $243,772.