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# Statistics for Management

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The pet-drug market is growing very rapidly. Before new pet drugs can be introduced into the market place, they must be approved by the U.S. Food and Drug Administration. In 1999, the Novartis Company was trying to get Anafranil, a drug to reduce dog anxiety, approved. According to an article Novartis had to find a way to translate a dog's anxiety symptoms into numbers that could be used to prove to the FDA that the drug had a statistically significant effect on the condition.

a. What is meant by the phrase statistically significant effect?
b. Consider an experiment in which dogs suffering from anxiety are divided into two groups. One group will be given Anafranil, and the other will be given a placebo. How can you translate a dog's anxiety symptom into numbers? In other words, define a continuous variable, X1, the measurement of the drug Anafranil, and X2, the measurement of the effectiveness of the placebo.

c. Building on your answer to part (b) define the null and alternative hypotheses for this study.

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#### Solution Preview

a. What is meant by the phrase statistically significant effect?
When Novartis Company says that the drug has a statistically significant effect on dog anxiety means that the studies of the company has conducted on the drug showed that there is a statistical evidence that the drug does have an effect on the condition. This also means that the difference in the dogs' conditions before an after the drug was caused by the drug and not the due to chance.

b. Consider ...

#### Solution Summary

Statistically significant effect is explained in the solution.

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