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12.13 [32 points total] Loss functions in drug approval. Suppose there is a test, with a test score indexed by x, that yields these abstract
12.13 [32 points total] Loss functions in drug approval. Suppose there is a test, with a test score indexed by x, that yields these abstract but simplied distributions of test outcomes for bad drugs (on the left) and good drugs (on the right) shown in Figure 12.10 below: Number of drugs Figure 12.10. Bad drug and g x good drug distributions for 0 1 3 5 10 Exercise 13. Like Figures 12.7 and 12.8 in the text, this gure shows two distributions side-by-side, and the bad drugs distribution occupies the left side because they are worse, but with uncertainty about exactly how worse according to the text. Unlike the gures in the text, these distributions are stylized, a rectangle and a triangle, so that you do not have to integrate the normal curve or other tomfoolery; you just have to eyeball and measure the areas of these simple shapes. The bad drug curve is a rectangle with total height 1 and total width 4 units. Formally: 1, if1 5, which only the good drug can reach, or if the test result were x
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