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Hamlin, Hamlin, & McGill (HHM) is a law firm in Albuquerque, New Mexico. When a HHM represents a group of people in a class action
Hamlin, Hamlin, & McGill (HHM) is a law firm in Albuquerque, New Mexico. When a HHM represents a group of people in a class action lawsuit and wins that lawsuit, the firm receives a percentage of the group's monetary settlement. That settlement amount is based on the total number of people in the group-the larger the group and the larger the settlement, the more money the firm will receive. A law firm is trying to decide whether to represent owners of washing machines in a class action lawsuit against the manufacturer (GE) of a certain make and model for a particular defect. If 5 percent of the washing machines of this make and model have the defect, the firm will not recover its expenses. Therefore, the firm will handle the lawsuit only if it is convinced that more than 5 percent of washing machines of this make and model have the defect. The firm plans to take a random sample of 1,000 people who bought this car and ask them if they experienced this defect in their washing machines. a. State the null and alternative hypotheses that the law firm should test and make sure to define your variables. b. In the context of this situation, describe Type I and Type II errors and describe them consequences of each of these for the law firm
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