If the cost of making a Type I error is high, a smaller value should be chosen for the
A) critical value.
B) confidence coefficient.
C) level of significance.
D) test statistic.

Question

If the cost of making a Type I error is high, a smaller value should be chosen for the​
A) ​critical value.
B) ​confidence coefficient.
C) ​level of significance.
D) ​test statistic.

Quizplus · Accepted Answer

The level of significance is the probability of making a Type I error and represents the threshold at which we reject the null hypothesis. If the cost of making a Type I error is high, we want to minimize the probability of rejecting the null hypothesis when it is in fact true. Therefore, a smaller value should be chosen for the level of significance to reduce the probability of making a Type I error.

If the Cost of Making a Type I Error Is