The Mortimor Chemical Company develops and manufactures pharmaceutical drugs for distribution and sale in the United States. The pharmaceutical business can be very lucrative when useful and safe drugs are introduced into the market. Whenever the Mortimor research lab considers putting a drug into production, the company must actually establish the following sets of null and alternative hypotheses:

Set 1 Set 2 H0: The drug is not safe. H0: The drug is not effective.

HA: The drug is safe. HA: The drug is effective.

Take each set of hypotheses separately.

a. Discuss the considerations that should be made in establishing alpha and beta.

b. For each set of hypotheses, describe what circumstances suggest that a Type I error would be of more concern.

c. For each set of hypotheses, describe what circumstances suggest that a Type II error would be of more concern.