Suppose that we wish to test the null hypothesis H0 that the proportion p of ledger sheets with errors is equal to .05 versus the alternative Ha , that the proportion is larger than .05, by using the following scheme. Two ledger sheets are selected at random. If both are error free, we reject H0. If one or more contains an error, we look at a third sheet. If the third sheet is error free, we reject H0. In all other cases, we accept H0.
a In terms of this problem, what is a type I error?
b What is the value of ? associated with this test?
c In terms of this problem, what is a type II error?
d Calculate ? = P(type II error) as a function of p.