The Power of a Test Is the Probability of Making

question 77

Multiple Choice

The power of a test is the probability of making:

• A) a correct decision when the null hypothesis is false.
• B) a correct decision when the null hypothesis is true.
• C) an incorrect decision when the null hypothesis is false.
• D) an incorrect decision when the null hypothesis is true.

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Definitions:

Bounded Rationality

A concept suggesting that decision-making is limited by the information available, cognitive limitations of the mind, and the finite amount of time available to make a decision.

Herbert Simon

An American economist and cognitive psychologist known for his research in the fields of decision-making and problem-solving, notably the concept of bounded rationality.

Behavioural Economic Theory

An approach combining psychological insights with economic theory to predict and understand human decision-making.

Ideal Goals

Objectives or aims that represent a perfect or most desirable outcome, often used as benchmarks for success or aspiration.