In the following problem, 'in context' means that you have to base your answers on the situation presented in the problem. Answers of only 'reject the null hypothesis' and/or 'fail to reject the null hypothesis' will receive no credit.

Many families have decided to use the TVs for broadband-delivered video (for example, from Netflix, Hula, and Sling) instead of pay-TV (cable and satellite) services. A local cable TV provider is concerned about losing market share and will decide to schedule more advertising if the average money received is less than $60 per home in the area. A random sample of homes in the area will be obtained.

a) State the null and alternative hypotheses. Write '' as '<=', '' as '>=', and '' as '<>'.

b) In context, explain what the Type I error is.

c) In context, explain what the Type II error is.

d) Which is worse for the cable company, a Type I error or a Type II error? Why?