Establishing alpha and beta

Reference no: EM13737631

The Oasis Chemical Company develops and manufactures pharmaceutical drugs for distribution and sale in the United States. The pharmaceutical business can be very lucrative when useful and safe drugs are introduced into the market. Whenever the Oasis research lab considers putting a drug into production, the company must establish the following sets of null and alternative hypotheses:

Set 1

Ho: The drug is safe

Ha: The drug is not safe

Set 2

Ho: The drug is effective

Ha: The drug is not effective

a. Discuss the considerations that should be made in establishing alpha and beta.

b. For each set of hypotheses, describe what circumstances would suggest that a Type I error would be of more concern. Carefully Explain.

c. For each set of hypotheses, describe what circumstances would suggest that a Type II error would be of more concern. Carefully Explain.

Reference no: EM13737631

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