A Large University Claims That the Average Cost of Housing

question 14

Essay

A large university claims that the average cost of housing within three miles of the campus is $6900 per school year. A high school student is preparing her budget for her freshman year at the university. She is concerned that the university's estimate is too low. Having taken AP Statistics, she decides to perform the following test of hypothesis: H₀: = 6900 versus H_a: > 6900, where represents the average cost of housing per year within three miles of the university.
Describe the Type I error for this problem.
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Describe the Type II error for this problem.
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Which error has more serious consequences for the student?
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Definitions:

Endocrine System

A collection of glands that produce hormones which regulate metabolism, growth and development, tissue function, and mood.

Exocrine Glands

Glands that release their secretions through ducts either to the external environment or into the internal organ surfaces.

Hypothalamus

A region of the brain below the thalamus that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, hunger, and thirst.

Plasma Proteins

Proteins present in blood plasma that play roles in blood clotting, immunity, and other functions.