Refer to Exercise 49 In exercise The company that produces the
Refer to Exercise 49.
In exercise
The company that produces the scratchandwin tickets for The FilthyRich Instant Win Super Lottery has assured you that exactly 10% of the tickets are winners (that is, they will pay the purchaser at least a dollar). As an inspector for The FilthyRich Instant Win Super Lottery, Inc., you want to be sure this is precisely the case: too high a percentage of winners would result in excessive payoffs; too few winners might bring on charges of consumer fraud and deception. You select a random sample of 200 tickets from a large order of tickets recently delivered by the ticket supplier and find that 28 of the tickets are winners. Set up a two tailed hypothesis test to determine whether this is sufficient sample evidence to reject the supplier’s claim that, overall, the order contains 10% winners. Use a significance level of 1%.
a. Describe what a Type I error would be in this situation.
b. Describe what a Type II error would be in this situation.
c. Describe the consequences of Type I and Type II error here.
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