Question

1. A team of researchers have developed a new weight loss drug. They want to know if patients who use the

new drug for two weeks lose any weight. The drug has some minor side effects including mild headaches and achiness. If the researchers obtain evidence of weight loss they will proceed to produce the drug commercially and sell it for a large profit. If they do not obtain evidence of weight loss they will end the project. [70 points]

A. State the null and alternative hypotheses that the researchers should test. Use m_d to denote the mean weight loss computed as beginning weight minus final weight.

B. What does a Type I error mean in this situation? What are the consequences of making a Type I error here?

C. What does a Type II error mean in this situation? What are the consequences of making a Type II error here?

D. In this scenario, is a Type I or Type II error more serious? Or, are they equally serious? Explain your reasoning.

E. If you were working with this research team, what alpha level would you use? Explain your reasoning.

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