The crisis in the real estate market caused the listing
The crisis in the real estate market caused the listing prices of homes in areas such as Orlando, Florida, to fall from previous years. A real estate office would like to sample 50 new listings randomly to test the hypothesis that the current listing price average is less than $ 243,000, the average in the previous year. Assume the standard deviation for the price of homes in this market is $ 45,000.
a. Explain in your own words how Type I and Type II errors can occur in this hypothesis test.
b. Using σ = 0.10, calculate the probability of a Type II error occurring if the actual average listing is $ 225,000.
c. Using σ = 0.05, calculate the probability of a Type II error occurring if the actual average listing is $ 225,000.
d. Explain the differences in the results you calculated in parts b and c.
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