- A hypothesis is a tentative statement about the relationship between two or more variables that is tested through collecting sample data. The null hypothesis states there is no relationship and the alternative hypothesis proposes an alternative relationship.
- Type I error occurs when a true null hypothesis is rejected. Type II error is failing to reject a false null hypothesis. Choosing a significance level balances these two errors, with a higher level increasing Type I errors and a lower level increasing Type II errors.
- In medical testing, it is better to make a Type II error and accept a null hypothesis of no drug difference when there actually is a difference, to avoid releasing an ineffective drug. So a lower significance level that increases Type II errors would be chosen.