Give your assessment of the relative costs of Type I and Type II errors in the following situations where a decision is pending:
a. A new synthetic feed additive is found in an experiment to accelerate the growth of hogs sufficiently to reduce the “time to market” by 10%. Should it be added to the feed?
b. Researchers examining longitudinal data that have been collected from a large cohort of nurses notice that those who drink more orange juice have a high incidence of asthma. Should consumption of orange juice be discouraged?
c. Analysts for a department store conduct an experiment and find that price tags with multiple successive markdowns that are visible on the tag generate more sales than tags with a single markdown indicated, even though the final price was the same in both cases. Should the store switch to a multiple markdown system?
d. An estate auction manager reviews auction revenue records and finds that auctions conducted in Hyatt hotels generate more revenue than those conducted in Radisson hotels. Should he or she henceforth conduct business only at Hyatt?