1. If an economist wishes to determine whether there is evidence that average family income in a community exceeds $25,000

a) either a one-tailed or two-tailed test could be used with equivalent results.

b) A one-tailed test should be utilized with the critical value on the right of our curve.

c) A two-tailed test should be utilized.

d) A one-tailed test should be utilized with the critical value on the left of our curve.

2. If a test of hypothesis has a Type I error of .01, we mean

a) If the null hypothesis is true, we dont reject it 1% of the time.

b) If the null hypothesis is true, we may reject it 1% of the time.

c) If the null hypothesis is false, we dont reject if 1% of the time.

d) If the null hypothesis is false, we may reject it 1% of the time.