The possibility of making a Type I or a Type II error is always present in decis

Question

The possibility of making a Type I or a Type II error is always present in decision making. The Food and Drug administration runs the risk of making these errors in their drug approval process. Reguardless of the decision made, the possibility of making a costly error cannot be estimated. A drug approval process in considered to operate under the following hypothesis:

H0: The drug is safe and effective vs Ha: The drug has unanticipated side effects

Comment on the conclusion when H0 cannot be rejected.

Explanation / Answer

Ho can't be rejected that mean we do not have sufficient evidence to conclude that the drug has unanticipated side effects.

Hence,

There might be the possibility of Type II error if the drug actually has unanticipated side effects because we are not rejecting the null hypothesis that the drug is safe. In this case, the patients who are being given this drug will suffer because we have considered the drug as safe whereas it has side effects.

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