Question: Refer to Exercise. For each of the two situations described, explain the consequences of a Type 1 error and the consequences of a Type 2 error. For part (a), explain which type would be more serious for the patients, and for part (b) explain which type would be more serious for the student who is planning the new service.
Exercise: For the following two situations, define the population parameter in words. Then specify the null and alternative hypotheses in symbols.
a. For people suffering from a certain type of chronic pain, 70% experience temporary relief when they take a standard medication. If a new medication appears to be more effective, it will replace the standard. Does the new medication provide pain relief to a larger proportion than the standard medication?
b. A student at a large university is thinking about starting a new service in which students can order their textbooks from his website and he will buy them at the bookstore and deliver them for a small service charge. He plans to survey a random sample of students and ask them whether or not they would be willing to pay for such a service. If he is convinced that more than 5% of students would use his service, he will go forward with it.