PS.P.6: Analyze decisions and strategies using probability concepts. Analyze probabilities to interpret odds and risk of events.

Analyze decisions and strategies using probability concepts. Analyze probabilities to interpret odds and risk of events.

Example Problems
A significance test is going to be performed using a significance level of . Suppose that the alternative hypothesis is actually true.

If the
significance level was raised to , which of the following would be true?
The
power of the test would: increase, decrease, or stay the same.
A significance test is going to be performed using a significance level of . Suppose that the null hypothesis is actually true.

If the
significance level was raised to , which of the following would be true?
The probability of a
Type I error would: increase, decrease, or stay the same.
A significance test is going to be performed using a significance level of . Suppose that the null hypothesis is actually true.

If the
significance level was lowered to , which of the following would be true?
The probability of a
Type I error would: increase, decrease, or stay the same.
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