Question

A government drug regulator believes that the toxicity level in a new drug is above the industry standard and is therefore unsafe for consumers. As the final arbitrator you are the person who has reviewed both the manufacture’s information and the government’s claim. You have the final authority to approve or deny this consumer drug …. Explain what would be a Type I and Type II error in this case. Which error would be more serious? Explain how both of these errors could be minimized simultaneously.

Answer 1

H0 : toxicity level in a new drug is above the industry standard

H1 : toxicity level in a new drug is appropriate as per the industry standard

type I error : Rejecting H0 when it is true : If I pass the drug saying that the  toxicity level in a new drug is appropriate as per the industry standard but actually it is above the industry standard

type II error : Accepting H0 when it is false : If I do not pass the drug saying toxicity level in a new drug is above the industry standard but actually it is appropriate as per the industry standard

type I error is more serious. since, an inappropriate drug with higher  toxicity level as per the industry standard will be used

To reduce both the error simultaneously, the sample size of population being tested with drug should be increased