Which of the Following Correctly Describes the Effect of Increasing

question 22

Multiple Choice

Which of the following correctly describes the effect of increasing the alpha level (for example from .01 to .05) ?

• A)increase the likelihood of rejecting H₀ and increase the risk of a Type I error
• B)decrease the likelihood of rejecting H₀ and increase the risk of a Type I error
• C)increase the likelihood of rejecting H₀ and decrease the risk of a Type I error
• D)decrease the likelihood of rejecting H₀ and decrease the risk of a Type I error

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Definitions:

Optimal Allocation

The most efficient distribution of resources within an economy to maximize the output or welfare.

MB = MC

A principle in economics indicating the optimal level of output or consumption, where the marginal benefit (MB) equals the marginal cost (MC).

Marginal Benefit

The added utility or pleasure that comes from the consumption of one more unit of a good or service.

Marginal Cost

The escalation in aggregate cost linked to the fabrication of an extra item of a good or service.