Question 2(5 Marks)

You work for a company that tests new pharmaceutical products. You are currently testing a new product. From a sample of 300 subjects, 184 report an improvement in their symptoms from taking the new product. The existing product improves the symptoms for 60% of people who take it.

a)State the null and alternative hypotheses that you would use to test the effectiveness of the new product.

b)Explain the risks associated with Type 1 and Type 2 errors in this context.

c)Which of the errors is more serious in this context? Give reasons for your answer.