The Oasis 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 Oasis 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 safe. H0: The drug is effective.
HA: The drug is not safe. HA: The drug is not 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 would suggest that a Type I error would be of more concern.

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