6) For the following problems, identify the hypotheses, defineType I and Type II errors, and discuss the consequences of eacherror. (When you set up the hypotheses, consider which is thehypothesis you are â€trying to proveâ€, and that is your alternative.The null hypothesis is then the status quo.)
a. The FDA judges the safety of new drugs. When faced with a newdrug, there are two possible decisions: approve the drug ordisapprove the drug.
b. You are faced with two investments. One is very risky, butpotential returns are high, while the other one is safe but thepotential is quite limited. Pick one.
c. You are an airline pilot. You smell smoke in the cockpit, andthe nearest airport is less than 5 minutes away. Should you landthe plane immediately?
