As in given Exercise, state regulators are checking up on repair shops to see if they are certifying vehicles that do not meet pollution standards.
a) In this context, what is meant by the power of the test the regulators are conducting?
b) Will the power be greater if they test 20 or 40 cars? Why?
c) Will the power be greater if they use a 5% or a 10% level of significance? Why?
d) Will the power be greater if the repair shop s inspectors are only a little out of compliance or a lot? Why?
Exercise :
Testing cars. A clean air standard requires that vehicle exhaust emissions not exceed specified limits for various pollutants. Many states require that cars be tested annually to be sure they meet these standards. Suppose state regulators double-check a random sample of cars that a suspect repair shop has certified as okay. They will revoke the shop's license if they find significant evidence that the shop is certifying vehicles that do not meet standards.
a) In this context, what is a Type I error?
b) In this context, what is a Type II error?
c) Which type of error would the shops owner consider more serious?
d) Which type of error might environmentalists consider more serious?