ECON 162 Chapter Notes - Chapter 1-16: Maeil Broadcasting Network, Null Hypothesis, French Fries
21 Oct 2018
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Chapter 1: it is about food and drug administration (fda) actions and the incident called. 1962 kefauver- harris amendments to the 1938 food. Type 1 error: happen when we reject a true null hypothesis. When such a drug is introduced, we say that type 1 error has been committed. Type 2 error: happen when we fail to reject a false null hypothesis. Ex: since 1962, the incidence of type 1 error the thalidomide possibility has been reduced by the added testing required by the fda. But other people have been the victims of what is called type 2 error. Chapter 2: it is about the economics of oil spills. Market value: current/most recently quoted price for a market-traded security. Ex: somebody offer 300 dollars for his house but nobody is willing to give for home more than: than its market value is 250 dollars. Incentive: something that motivates or encourages someone to do something.
