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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 shop's owner consider more serious?

d) Which type of error might environmentalists consider more serious?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91724201

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