Hwk6SolnFinDrtSp06

Hwk6SolnFinDrtSp06 - HW VI Solutions Question 1 Type I...

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HW VI Solutions Question 1 . Type I error is rejecting the null when it’s true. Type II error is failing to reject the null when it’s false. a) A drug company is testing new arthritis pain medicine, but they are worried that the likelihood of a heart attack as a side-effect is too high. The null hypothesis would be that there is a high likelihood of a heart attack as a side- effect. The alternative hypothesis would be that the new pain medicine does not have a side-effect. A Type I error would be to conclude that the pain medicine is not likely to have a heart attack-as a side-effect when it really does. A Type II error would be to not think it’s safe to release the medicine because you think it has the side-effect when it really doesn’t. b) A restaurant uses a new reservation system to lower waiting times. The null hypothesis is that the new system has no impact upon the waiting times. The alternative hypothesis would be that the new reservation system has a significantly lower waiting time than the old reservation system. A Type I error would be that you conclude the system reduced waiting times when it really didn’t. A Type II error would be that you didn’t conclude it reduced waiting times when it did. c) A cruise line publishes new, expensive brochures, hoping to increase bookings. The null hypothesis is that there is no change in bookings. The alternative hypothesis would be that the new brochures actually increased bookings. A Type I error would occur when you feel it has increased bookings when it really hasn’t. A Type II error would be when you think it has not increased bookings when it actually has. d) A hotel chain redesigns their frequent guest program (loyalty program) in order to increase average frequent guest satisfaction ratings. The null hypothesis is when the average guest satisfaction rating has not changed. The alternative hypothesis is that there is in increase in the guest satisfaction ratings
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This homework help was uploaded on 02/19/2008 for the course H ADM 201 taught by Professor Rlloyd during the Spring '06 term at Cornell.

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Hwk6SolnFinDrtSp06 - HW VI Solutions Question 1 Type I...

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