Carpetland carpet installers earn an average profit of $\$ 300$ for each carpet installed. Joan Chen, the firm's vice president, proposes a new procedure for installations, which she hopes will be more efficient. Joan hopes that the results of a trial period will enable her to conclude with a level of significance of 0.05 that the new procedure increases the average profit of installing a carpet.
What will be the consequences if she makes a Type I error on her hypothesis test?
A Type l error would mean that Carpetland does not implement a new procedure that increases profits.
A Type I error would mean that Carpetland does not implement a new proceduré that decreases profits..
A Type I error would mean that Carpetland implements a new procedure that actually increases profits.
A Type l error would mean that Carpetland implements a new procedure that actually does not increase profits.
A Type I error would mean that Carpetland implements a new procedure that actually does not decrease profits.
A Type I error would mean that Carpetland implements a new procedure that actually decreases profits.
Answer
So, the correct answer is 'A Type l error would mean that Carpetland implements a new procedure that actually does not increase profits.'
Step 1 ：A Type I error, also known as a false positive, occurs when we reject a true null hypothesis. In this context, the null hypothesis is that the new procedure does not increase the average profit of installing a carpet.
Step 2 ：Therefore, a Type I error would mean that Joan concludes that the new procedure increases the average profit when it actually does not.
Step 3 ：So, the correct answer is 'A Type l error would mean that Carpetland implements a new procedure that actually does not increase profits.'
