Three years ago, the mean price of an existing single-family home was $243761. A real estate broker believes that existing home prices in her neighborhood are higher. (a) Determine the null and alternative hypotheses. (b) Explain what it would mean to make a Type I error. (c) Explain what it would mean to make a Type II error. (a) State the hypotheses.
Accepted Solution
A:
Answer with Step-by-step explanation:Since we have given thatMean price of an existing single family home = $243761So, the hypothesis:[tex]H_0:\mu=243761\\\\H_a:\mu>243761[/tex]Type I error is a error in which null hypothesis is correct and actual but it gets rejected.It means mean price is exactly $243761, but it is proved that mean price would be higher than $246761.Type II error is a error in which null hypothesis is not correct but inspite of that it gets accepted.So, here, mean price is higher than $243761 but it is proved by calculation that mean price is equal to $243761.