14.12 Exercises 1. Review questions a) Explain briefly what is meant by a null h

Question

14.12 Exercises 1. Review questions a) Explain briefly what is meant by a null hypothesis and an alter native hypothesis. b) What does it mean to commit, respectively, a type I and a type II error? Give an example of each. c) What do you understand by the significance level? d) Account in brief for the different steps in the construction of a hypothesis test. e) What is your interpretation ofthe p-value and the critical values? f) Explain the difference between a one-sided and a two-sided ternative hypothesis. What implications does this have for the calculation ofp-values and critical values? g) What do you understand by a test's power? h) Briefly explain the conditions under which the various test statis- tics can be used when you want to test a hypothesis about a mean value. Also specify their distributions under HO i) Explain briefly how you choose your sample size so as to obtain j) Explain which test statistic you use to test a hypothesis about a k) What is the difference between statistical and practical signifi I) Explain the relationship between hypothesis testing and confi certain probabilities ofcommitting type I and type II errors variance cance? dence intervals.

Explanation / Answer

a. A null hypothesis is hypothesis which says that there is no significance between two variables whereas alternative is hypothesis which says there is significant difference between two variables.

b. A type I error (or error of the first kind) is the incorrect rejection of a true null hypothesis. Usually atype I error leads one to conclude that a supposed effect or relationship exists when in fact it doesn't. A type II error (or error of the second kind) is the failure to reject a false null hypothesis.

c. Significance is probability of rejecting null hypothesis given that it is true. It is generally set as 5%

d. Below are steps for hypothesis testing

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