In Cities and Towns on the Borders Between States There

question 30

Essay

In cities and towns on the borders between states there is a significant amount of flight across state lines to avoid high state taxes on gasoline. Some states (such as Iowa) have large rivers for borders and tolls to cross the bridges. Do these tolls impede traffic to other states to get cheaper gasoline? To test this hypothesis, an experimental Toll-Free Week will be instituted at the Farmington Bridge, where currently 50 cars per day drive out of the state. Let μ denote the true average number of border crossings per day at Farmington if there were no toll.
a) What is the appropriate null hypothesis?
b) What is the appropriate alternative hypothesis?
c) In your own words, distinguish between a Type I and a Type II error in this context.

---

Definitions:

Process

A series of actions or steps taken to achieve a particular end.

Theoretical Result

An outcome derived from abstract principles and reasoning, often without practical application or empirical testing.

Classical

Classical refers to the established theories and principles that have withstood the test of time, often foundational in fields like physics, music, and literature.

Probability

The likelihood that a particular event will happen, often expressed as a fraction or percentage reflecting the ratio of the occurrences of an event to the total number of possible outcomes.