Question: 30

The R. R. Bowker Company of New York collects information on retail prices of books and publishes the data in The Bowker Annual Library and Book Trade Almanac. In 2000, the mean retail price of agriculture books was $66.52. A hypothesis test is to be performed to decide whether this year’s mean retail price of agriculture books has changed from 2000 mean. The null and alternative hypotheses are:

= $66.52

= $66.52,

Where is this year’s mean retail price of agriculture books.

Explain what each of the following would mean.

a. Type I Error

b. Type II Error

c. Correct decision

Now suppose that the results of carrying out the hypotheses test lead to rejection of the null hypotheses. Classify that conclusion by error type or as a correct decision if in fact this year’s mean retail price of agriculture books

d. Equals the 2000 mean of $66.52.

e. Differs from the 2000 mean of $66.52.