asmt3_summer2011

# asmt3_summer2011 - UNIVERSITY OF VICTORIA Economics 246...

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UNIVERSITY OF VICTORIA August 5, 2011 Economics 246: Statistical Inference Summer 2011 Assignment #3 Due: Friday 12 th of August, 2011, 12 noon. (In the box marked “Econ 246" near the Economics Department Office.) Hand in your EViews printout. Question 1: (3 marks; 1 each) State whether each of following statements is true or false, and explain why. (i) The probability of the Type I error and the probability of the Type II error always add to 1. (ii) Increasing the value of α increases the value of β . (iii) The smaller the specified value of is, the larger the rejection region. Question 2: (3 Marks; 1 each) An automobile manufacturer must decide whether the design of its seatbelts in their newest vehicle is safe. The null hypothesis is “the design of the seatbelt is safe.” (i) What is the alternative hypothesis? (ii) Explain what the Type I and Type II errors are in this situation. (iii) Which type of error is more serious?

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## This note was uploaded on 01/27/2012 for the course ECON 204 taught by Professor Beryl li during the Spring '11 term at University of Victoria.

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asmt3_summer2011 - UNIVERSITY OF VICTORIA Economics 246...

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