Gender discrimination. A bank has been sued for gender discrimination because 12% of the businesswomen who asked for loans were turned down when only 9% of all loan applications were turned down. Is this strong evidence that there is discrimination against women?

a) Is this a one-tailed or a two-tailed test? Why?

b) In this context, what would a Type I error be?

c) In this context, what would a Type II error be?

d) In this context, what is meant by the power of the test?

e) If the hypothesis is tested at the 1% level of significance instead of 5%, how will this affect the power of the test?

f) The lawsuit is based on a survey 1165 business owners.

Is the power of the test higher than, lower than, or the same as it would be if it were based on 2000 business owners?