Mong Corporation makes auto batteries. The company claims that 80% of its LL70 batteries are good for 70 months or longer. A consumer agency wanted to check if this claim is true. The agency took a random sample of 40 such batteries and found that 75% of them were good for 70 months or longer.
a. Using a 1% significance level, can you conclude that the company’s claim is false?
b. What will your decision be in part a if the probability of making a Type I error is zero? Explain.