2. According to the February 2008 Federal Trade Commission report on consumer fr
ID: 3368520 • Letter: 2
Question
2. According to the February 2008 Federal Trade Commission report on consumer fraud and identity theft, 23% of all complaints in 2007 were for identity theft. In that year, Alaska had 321 complaints of identity theft out of 1,432 consumer complaints ("Consumer fraud and," 2008). Does this data provide enough evidence to show that Alaska had a lower proportion of identity theft than 23%? Test at the significance level of 1%. Match the type I and type II errors in this case, consequences of each error type for this situation, and appropriate alpha level to use with their correct determinations (not all determinations will be used!).
Type II error
Type I error consequence
Correct level of significance ("alpha level") ? to use for test
Type I error
Type II error consequence
p < 0.23 when it is actually ? 0.23
p ? 0.23 when it is actually < 0.23
"identity theft in Alaska is a big problem" when it actually isn't; too many resources are allocated to problem at expense of other crime problems
"identity theft in Alaska isn't that big a problem" when it actually is; as result insufficient resources are allocated to fight identity theft crime
? = 0.10
? = 0.05
? = 0.01
____Type II error
____Type I error consequence
____Correct level of significance ("alpha level") ? to use for test
____Type I error
____Type II error consequence
1.p < 0.23 when it is actually ? 0.23
2.p ? 0.23 when it is actually < 0.23
3."identity theft in Alaska is a big problem" when it actually isn't; too many resources are allocated to problem at expense of other crime problems
4."identity theft in Alaska isn't that big a problem" when it actually is; as result insufficient resources are allocated to fight identity theft crime
5.? = 0.10
6.? = 0.05
7.? = 0.01
Explanation / Answer
Ans:
Type II error:
p ? 0.23 when it is actually < 0.23
Type I error consequence:
"identity theft in Alaska isn't that big a problem" when it actually is.
Correct level of significance ("alpha level") ? to use for test:
? = 0.05
Type I error:
p < 0.23 when it is actually ? 0.23
Type II error consequence:
"identity theft in Alaska is a big problem" when it actually isn't; too many
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