Television Manufacturer's Claim Analysis: Type I and Type II Errors
What are Type I and Type II errors in the context of the television manufacturer's claim analysis?
Type I error refers to rejecting the null hypothesis (H0) when it is actually true. In this case, a Type I error would mean obtaining convincing evidence that less than 90% of the TV sets need repair when, in reality, (at least) 90% of the sets do not need repair. The consequence of this error would be the consumer agency taking action against the manufacturer based on incorrect evidence, falsely accusing them of false advertising. Type II error, on the other hand, occurs when we fail to reject the null hypothesis (H0) when it is false. In this scenario, a Type II error would mean not obtaining convincing evidence that less than 90% of the TV sets need repair when, in fact, less than 90% of the sets do require repair. The consequence of this error would be that the consumer agency does not take action against the manufacturer, even though the manufacturer's claims about the reliability of the TV sets are untrue.