#significance-level

Question 1: Single choice

A food-safety inspector tests $H_0$ : the restaurant meets sanitation regulations, against $H_A$ : it does not; rejecting $H_0$ means the restaurant's licence is revoked. For diners, a Type 2 error is the more harmful mistake. From the diners' point of view, how should the significance level $\alpha$ be chosen?

Larger, so that less evidence is needed to revoke a licence1
Smaller, because a smaller $\alpha$ reduces the chance of a Type 2 error2
It does not matter, because $\alpha$ controls only Type 1 errors3
Always 0.05, whatever the costs of the two errors4

Timed test