BUS 302 Lecture Notes - Lecture 3: Type I And Type Ii Errors, Null Hypothesis, Alternative Hypothesis
Document Summary
Hypotheses that are made are usually not 100% correct, which create errors. There are two types of errors: type i and type ii. Type i error depicts the rejection of the null hypothesis when it is true while using the probability alpha ( ). Failing to reject the null hypothesis leads to a type ii error, which uses the probability beta ( ). In this case, the consortium made a prediction that the percentage is 10% or more of customers resent the commercial/ads is the null hypothesis. Null hypothesis is the hypothesis that sample observations result purely from chance. H0: p = . 10 (if 10% or greater, the consortium should consider a settlement. ) Alternative hypothesis is the hypothesis that sample observations are influenced by some non-random cause. H1: p < . 10 (if 10% of less, the consortium should vigorously defend any lawsuit. )
