Your company markets a computerized medical diagnostic progr

Your company markets a computerized medical diagnostic program used to evaluate thousands of people. The program scans the results of routine medical tests (pulse rate, blood tests, etc.) and refers the case to a doctor if there is evidence of a medical problem. The program makes decision about each person.

a) What are the two hypotheses of a

Solution

a) H0: The person is healthy

Ha: the person is ill

b) When we reject a person who is actually healthy and conclude that he is ill, then it is called type 1 error.

This is the error of false positives.

When a person is ill and we conclude that he is healthy, then it is called type 2 error. This is the error of false negatives.

c) we can reduce type 1 error, by decreasing the level of significance. We can fix it at 1% rather than 5%.