1) The null hypothesis assumes that a process is producing no more than a maximum allowable rate of defective items. The Type II error occurs when we erroneously conclude that the process is not producing more defective items than the maximum allowable rate, even though it actually is. In other words, we fail to reject the null hypothesis when it is actually false.
2) The 95% confidence limits for the mean Mu are (6.5, 8.5). This means that we are 95% confident that the true value of Mu lies within this interval. In statistical terms, it means that if we repeated the experiment many times and calculated confidence intervals in the same way, 95% of those intervals would contain the true value of Mu.