Question

CoStar would like to test if the vacancy rate for "warehouse" stores is more than 8%. A Type I error would occur if CoStar concludes that the vacancy rate was

Answer 1

Complete Question

CoStar would like to test if the vacancy rate for "warehouse" stores is more than 8%. A type 1 error would occur if CoStar concludes that the vacancy rate was

A: not equal to 8% when, in reality, the proportion was equal to 8%

B: 8% or less when, in reality, the proportion was more than 8%

C: equal to 8% when, in reality, the proportion was 8% or less

D: more than 8% when, in reality, the proportion was 8% or less

Answer:

The correct option is D

Explanation:

From the question we are told that

CoStar would like to test if the vacancy rate for "warehouse" stores is more than 8%.

Hence

The null hypothesis is
`H_o : p \le 0.08`

The alternative hypothesis is
`H_a : p> 0.08`

Generally type 1 error occurs when null hypothesis is rejected while it is true

So Type I error would occur if CoStar concludes that the vacancy rate was more than 8% when, in reality, the proportion was 8% or less