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1. I am deciding on whether to invest 400,000 CAD to open a convenience store in particular spot in Ottawa. I know that the business will be profitable, with income of 70,000 CAD per year, if the store will have in average μ = 60 or more customers per day. If I am convinced that the business will be profitable then I will go ahead and open the store otherwise I won't. Hence I am dealing with this hypothesis testing problem. complete solutions correct answers key
H0 : μ = 60 vs Ha : μ < 60
(A) Explain what Type I error means in the context of this problem.
(B) What is the consequence of Type I error.
(C) Explain what Type II error means in this context.
(D) What is the consequence of Type II error in the context of this problem.
(E) Which error is more expensive in your opinion. Explain.
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