15) Travelocity would like to test if the average roundtrip airfare between New

Question

15) Travelocity would like to test if the average roundtrip airfare between New York and London is less than S1,400. A Type I error would occur if Travelocity concludes that the average airfare is A) equal to $1,400 when, in reality, the average airfare is not equal S1,400 or more. B) not equal to S1.400 when, in reality, the average airfare is equal to S1,400. C) $1,400 or more when, in reality, the average airfare is less than $1,400. D) less than S1,400 when, in reality, the average airfare is $1,400 or more.

Explanation / Answer

Type I error is associated with rejecting the null hypothesis when it is true. So in the given scenario:

Type I error will be that Travelocity concludes that the average airfare is less than $1400 when in reality, the average airfare is $1400 or more.

Option D is correct.

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