Federal law requires that a jar of peanut butter that is labeled as containing 32 ounces must contain at least 32 ounces. An independent consumer advocate feels that a certain peanut butter manufacturer is shorting customers by under filling the jars so that the mean content is less than 32 ounces as stated on the label. The hypotheses tested are . a) In the context of this example, describe type I and type II errors. Give lots of details. b) If you owned the peanut better plant which type of error would you consider more serious (from a business point of view)? Explain, giving lots of details. c) Based on your answer to part b, should you choose α = 0.01 or α = 0.10?
Federal law requires that a jar of peanut butter that is labeled as containing 32 ounces must contain at least 32 ounces. An independent consumer advocate feels that a certain peanut butter manufacturer is shorting customers by under filling the jars so that the mean content is less than 32 ounces as stated on the label. The hypotheses tested are .
a) In the context of this example, describe type I and type II errors. Give lots of details.
b) If you owned the peanut better plant which type of error would you consider more serious (from a business point of view)? Explain, giving lots of details.
c) Based on your answer to part b, should you choose α = 0.01 or α = 0.10?
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