A gasoline refinery has developed a new gasoline that, theoretically, reduces gas consumption per 100 kilometres driven (or, to use a non-metric phrase, provides improved gas mileage).The company wants to gather evidence to see whether the new gasoline actually does provide better gas mileage. Suppose the refinery knows that for a wide range of four-passenger compact cars, the average gas consumption per 100 kilometres was 10.6 litres for the old gasoline formulation.
a. What are the null and alternative hypotheses for this situation?
b. Explain the Type I and Type II errors in the context of testing the new gasoline.