Arthritis is a painful, chronic inflammation of the joints. Suppose a pharamceut

Question

Arthritis is a painful, chronic inflammation of the joints. Suppose a pharamceutical company comes up with a new drug to help relieve this pain. Like any experimental drug, there could be side effects. The company conducts an experiment on a random sample of volunteers to determine how many experience adverse effects. If more than 3% of users suffer side effects, the Food and Drug Administration (FDA) will not approve the drug in its current state. 440 subjects with chronic arthritis were given ibuprofen for pain relief; 23 subjects suffered from adverse side effects. Given this information, should the FDA pass or reject the drug?

Explanation / Answer

null hypothesis: p=0.03

alternate hypothesis: p>0.03

here p=0.03

hence std errorr =(p(1-p)/n)1/2 where n=440

=0.0085

for phat =23/400=0.0575

hence test stat z=(phat-p)/std error =3.2242

for above test stat z; p value =0.0006

as p value is significantly low; we reject null hypothessis, and FDA should reject then drug

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