The owner of a small clothing store is concerned that only 28% of people who enter her store actually buy something. A marketing salesman suggests that she invest in a new line of celebrity mannequins (think Seth Rogan modeling the latest jeans…). He loans her several different "people" to scatter around the store for a two-week trial period. The owner carefully counts how many shoppers enter the store and how many buy something so that at the end of the trial she can decide if she'll purchase the mannequins. She'll buy the mannequins if there is evidence that the percentage of people that buy something increases.
-In this context describe a Type I error and the impact such an error would have on the store.

Question

The owner of a small clothing store is concerned that only 28% of people who enter her store actually buy something. A marketing salesman suggests that she invest in a new line of celebrity mannequins (think Seth Rogan modeling the latest jeans…). He loans her several different "people" to scatter around the store for a two-week trial period. The owner carefully counts how many shoppers enter the store and how many buy something so that at the end of the trial she can decide if she'll purchase the mannequins.  She'll buy the mannequins if there is evidence that the percentage of people that buy something increases.
-In this context describe a Type I error and the impact such an error would have on the store.

Quizplus · Accepted Answer

The Answer of The owner of a small clothing store is concerned that only 28% of people who enter her store actually buy something. A marketing salesman suggests that she invest in a new line of celebrity mannequins (think Seth Rogan modeling the latest jeans…). He loans her several different "people" to scatter around the store for a two-week trial period. The owner carefully counts how many shoppers enter the store and how many buy something so that at the end of the trial she can decide if she'll purchase the mannequins.  She'll buy the mannequins if there is evidence that the percentage of people that buy something increases.
-In this context describe a Type I error and the impact such an error would have on the store.

The Owner of a Small Clothing Store Is Concerned That