For each of the following:

a) state the null and alternative hypotheses
b) state the type I & type II errors
c) state the consequences of each error
d) is one more serious? Explain.

1) You have created a new manufacturing method for producing widgets which you claim will reduce the time necessary for assembling the parts. Currently it takes 75 seconds to produce a widget. The retooling of the plant for this change is very expensive and will involve a lot of down-time.

2) You are interested in building a new restaurant in an area if the income level is high enough to support the business. In order to open the restaurant, you estimate that a per capita income of $45,000 is needed.

3) A manufacturer of handheld calculators receives very large shipments of printed circuits from a supplier. It is too costly and time-consuming to inspect all incoming circuits, so when each shipment arrives, a sample is selected for inspection. The shipment is rejected only if the proportion of defective circuits is more than 5% and the entire shipment is returned to the supplier due to inferior quality.