Question: Economics and Finance A shadow chief secretary to the treasury claims that first-time home buyers in the South Downs area (near Worthing in Sussex, England) are paying (on average) more than £1367 in stamp duty. The shadow chief secretary believes this steep tax is prohibiting families from buying a first home in this area. A random sample of first-time home buyers will be obtained, and the stamp duty paid by each family will be recorded. These data will be used to determine whether there is any evidence the mean stamp duty for first time home buyers, μ, is more than £1367.
a. State the null and alternative hypotheses in terms of μ.
b. Describe a type I error and a type II error in this context.