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The Economics of Public Issues

The Economics of Public Issues

In Chapter 1 of The Economics of Public Issues, you read about the consequences of increased Federal Drug Administration (FDA) testing requirements for new drugs. Every time a new drug is introduced, there is a chance that it should not have been. This is called a Type I error. When the availability of a drug that should be introduced is delayed, this is called a Type II error.

Briefly describe a situation from your personal or professional life in which you had to confront a risk, and you committed either a Type I or a Type II error in your decision making. Then, analyze your decision in terms of opportunity cost, incentives, and efficiency.


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