Consider an Experiment in Which a Pharmaceutical Company Is Testing

question 8

Multiple Choice

Consider an experiment in which a pharmaceutical company is testing a new drug that they hope will lower cholesterol levels. They administer three treatments: A dose of the drug, a dose of a placebo, and a control group that receives neither drug nor placebo. after 24 hours they then measured the cholesterol levels and compared the values to baseline levels measured prior to treatment. The table below shows the results of the experiment.
​​ $\begin{array}{|l|l|l|}\hline \text { Treatment } & \text { Chol. lower } & \begin{array}{l}\text { Chol. increased } \\\text { or the same }\end{array} \\\hline \text { Drug } & 64 & 36 \\\hline \text { Placebo } & 51 & 49 \\\hline \text { Control } & 48 & 52 \\\hline\end{array}$
-What proportion of individuals in the experiment showed cholesterol levels that increased or stayed the same?

• A) 0.38
• B) 0.46
• C) 0.54
• D) 0.62

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Definitions:

Competitive Price-searcher Market

A market structure where firms have some control over the pricing of their products due to differentiation, but still face significant competition.

Market Demand

The overall volume of a good or service that consumers in a market are ready and able to buy across a range of prices.

ATC

Stands for Average Total Cost, which is the total cost of production (fixed plus variable costs) divided by the number of units produced.