Discussion:
In the context of hypothesis test, state what is meant by:
(i). Type I error
(ii). Type II error
(iii). Power of the test
What connections are there, if any, between them?
The sales and marketing team in motor business is investigating the quality of second hand cars. One indicator of quality is the number of miles on the clock. The following table gives the summary statistics of the miles on the clock for two different engine size models.
Sample size Mean Standard deviation
Model 1.8 10 8840 1928
Model 1.4 8 6180 920
(i) Using a 1% level of significance, test whether there is any significant difference in the variances between the two models.
(ii) Test the hypothesis that the average mileage for model 1.8 is greater than for model 1.4 at the 1% level of significance and interpret your results.