Assume That a Hypothesis Test of the Given Claim Will

question 131

Multiple Choice

Assume that a hypothesis test of the given claim will be conducted. Identify the type I or type II error for the test.
-A consumer advocacy group claims that the mean mileage for the Carter Motor Company's new sedan is less than 21 miles per gallon. Identify the type I error for the test.

• A) Fail to reject the claim that the mean is equal to 21 miles per gallon when it is actually greater than 21 miles per gallon.
• B) Reject the claim that the mean is equal to 21 miles per gallon when it is actually 21 miles per gallon.
• C) Fail to reject the claim that the mean is equal to 21 miles per gallon when it is actually less than 21 miles per gallon.
• D) Reject the claim that the mean is equal to 21 miles per gallon when it is actually less than 21 miles per gallon.

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Definitions:

Annual Fixed Costs

Expenses that a business incurs that do not fluctuate with changes in production level or sales volume, such as rent or salaries, benchmarked on a yearly basis.

Graphical Approach

A method of solving problems or representing data using charts, graphs, or diagrams.

CVP Analysis

Short for Cost-Volume-Profit Analysis, a tool used to determine how changes in cost and volume affect a company's operating income and net income.

Variable Costs

Variable Costs are costs that vary directly with the level of production or sales volume.