Pharmaceutical companies spend billions of dollars per year on research and development of new drugs. The...

Pharmaceutical companies spend billions of dollars per year on research and development of new drugs. The pharmaceutical company must subject each new drug to lengthy and involved testing before receiving the necessary permission from the Food and Drug Administration (FDA) to market the drug. The FDA's policy is that the pharmaceutical company must provide substantial evidence that a new drug is safe prior to receiving FDA approval, so that the FDA can confidently certify the safety of the drug to potential consumers.

a.) If the new drug testing were to be placed in a test of hypothesis framework, would the null hypothesis be that the drug is safe or unsafe? The alternative hypothesis? (In an actual test, "safety" could be quantified using population parameters.) Fill in the blanks below.

The null hypothesis would be that the drug is Select an answer safe unsafe and the alternative hypothesis would be that the drug is Select an answer safe unsafe .

b.) Describe the Type I and Type II errors in terms of this application. Fill in the blanks below.

The Type I error for this problem would be to conclude that the drug is Select an answer safe unsafe when the drug is actually Select an answer unsafe safe The Type II error for this problem would be to conclude that the drug is Select an answer safe unsafe when the drug is actually Select an answer safe unsafe .

Recall: αα is the probability of making a Type I error and ββ is the probability of making a Type II error.

c.) If the FDA wants to be very confident that the drug is safe before permitting it to be marketed, is it more important that αα or ββ be small?

The value of ββ should be minimized to minimize the risk of falsely concluding the drug is safe when it is not safe and could hurt people.
The value of αα should be minimized to minimize the risk of falsely concluding the drug is not safe when it is safe and could help people.
The value of αα should be minimized to minimize the risk of falsely concluding the drug is safe when it is not safe and could hurt people.
The value of ββ should be minimized to minimize the risk of falsely concluding the drug is not safe when it is safe and could help people.

Expert Solution

orchestra answered 2 years ago

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