Question

Suppose that in your research you use a 0.05 level of significance. But you worry about a making a Type 1 error. Which of the following adjustments to your significance level could lessen the probability of making that error?

Set your new significance level to 0.07, 0.01, 0.09, 8%, 0.1, 0.5, 0.05, or -0.001

Answer 1

Solution :

The type 1 error is the error committed by rejecting the null hypothesis when actually the null hypothesis is true.

Now based on p-value and significance level the decision rule is as follows :

If p-value is less than the significance level, then we reject the null hypothesis.

If p-value is greater than the significance level, then we fail to reject the null hypothesis.

Now, if we set the significance level as minimum as possible the chance of making the type 1 error will be least.

In the given significance levels one significance level is -0.001, which is not possible, because significance level can not be negative. So, now the least significance level among the given significance levels is 0.01.

Hence, one could use significance level of 0.01 to lessen the probability of type 1 error.