For Exercises 19–22, do the following:

  1. Provide the null and alternative hypotheses.
  2. Explain what it would mean to make a Type I error.
  3. Explain what it would mean to make a Type II error.

Question 9.21

21. A health maintenance organization wants to examine whether a new treatment method has decreased the mean cost from the $20,000 cost of the previous treatment.

9.1.21

(a) versus (b) Conclude that the population mean cost of the new treatment has decreased from the cost of the previous treatment when, in reality, it has remained the same. (c) Conclude that the population mean cost of the new treatment has remained the same as the cost of the previous treatment when, in reality, it has decreased.