Which of the Following Statements About Possible Errors in Hypothesis

question 63

Multiple Choice

Which of the following statements about possible errors in hypothesis tests is correct?

• A) The probability of correctly accepting a true null hypothesis equals 1 - α and is called the confidence level of the hypothesis test
• B) The probability of making the Type II error of incorrectly rejecting a true null hypothesis equals α and is called test's significance level or a risk
• C) The probability of making the Type I error of incorrectly accepting a false null hypothesis equals β and is called the β risk
• D) The probability of correctly rejecting a false null hypothesis equals β and is called the power of the hypothesis test
• E) The probability of correctly accepting a true null hypothesis equals 1 - β and is called the confidence level of the hypothesis test

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Definitions:

Costs

The expenses or value sacrificed in the production or procurement of goods and services.

AVC

Average Variable Cost, which is the total variable costs divided by quantity of output produced.

ATC

Average Total Cost; the sum of all production costs divided by the quantity of output produced.

Perfectly Competitive Firm

A business operating in a market where there are many buyers and sellers, all selling identical products, with no barriers to entry or exit.