1. The manager of a chain of discount department stores wishes to estimate the total number of erroneous discounts allowed by sales clerks during the last month. A random sample of 1000 of the chain's 57,532 transactions for the last month reveals that erroneous discounts were allowed on 41 of the transactions. Use this sample information to find a point estimate of and a 95 percent confidence interval for the total number of erroneous discounts allowed during the last month.
CONCEPTS
2. Define each of the following: Type I error, and Type II error.
3. When testing a hypothesis, why don't we set the probability of a Type I error to be extremely small? Explain.