A pharmaceutical company has a drug they think is better at lowering blood pressure than the current medication, but it costs more money for consumers. They conduct a significance test on their clinical study (H₀: The new drug works the same as the old drug, Ha: The new drug works better than the old drug.) Which statement about errors is correct?
A) A Type I error means people pay more money for a drug that doesn't work better.
B) If they reject the null hypothesis, it is possible that they are rejecting a Type II error.
C) A Type I error means people keep using the old drug when a new drug works better.
D) If they fail to reject the null hypothesis, they might be committing a Type I error.
E) A Type II error would mean that they did not use randomization in their experiment.

Question

Quizplus · Accepted Answer

A Type I error occurs when the null hypothesis is incorrectly rejected, meaning the new drug is not actually better, yet it is concluded to be better, leading to people paying more for no additional benefit.

A Pharmaceutical Company Has a Drug They Think Is Better