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Restaurant power problems Refer to Exercises 86 and 88

a. Explain one disadvantage of using =0.10 instead of =0.05 when

performing the test.

b. Explain one disadvantage of taking a random sample of 50 people instead of 30 people.

Short Answer

Expert verified

Part (a) There is the most likely to have a type I error.

Part (b) There is more time consuming and costly to collect the data.

Step by step solution

01

Part (a) Step 1: Given information

=0.05H0:=$85,000>$85,000=$86,000
02

Part (a) Step 2: Explanation

Type I error: Reject the null hypothesis H0, once the null hypothesis H0is true.

Showing the probability of a type I error.

If you increase =0.05to=0.10 the likelihood of making a type I error increases, and you're more likely to make one, which is a negative.

03

Part (b) Step 1: Explanation

If the sample size is increased from 30to 50persons, collecting data for the 50people will take longer and cost more money than collecting data for the 30people (as there are about twice as many potatoes about which we need to gather information.).

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