Probability%20Homework%20V

Probability%20Homework%20V - bed for a day. Should you get...

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Philosophy 120 Chapter 11, Homework V Use probability to determine the rational decision in the following cases: 1) You are playing poker, and you have a decent, but not great hand. Using some method, you have determined that you have a mere one out of five chance of winning the hand. There is \$80 in the pot, and your only remaining opponent has just bet \$16. Should you call? 2) You are on the game, “Deal or no Deal”. There are five cases left, one of which is yours. The remaining cases have the values of \$5, \$2,000, \$4,000, \$250,000 and \$1,000,000. You are offered \$210,000 for your case. Should you take it? 3) It’s flu season, and you are thinking of getting a flu shot. It’s a particularly bad epidemic, and 4 out of every 10 people who don’t get inoculated catch the flu, and said flu would keep you bedridden for 6 days. However, one out of every 8 people who gets inoculated actually gets an extremely weak form of the flu from the injection, and is in
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Unformatted text preview: bed for a day. Should you get a vaccination? 4) Suppose you drive a used car that is in pretty bad shape. You have no comprehensive insurance, but are considering buying a special theft policy that would give you \$1,000 (the replacement value) if the car were stolen. You judge the probability of losing your car to theft in any given year to be 1/200. If the insurance would cost you \$10 per year, should you purchase it? 5) You work for an insurance firm and thus only care about making money. You offer a comprehensive package that costs \$300 per year. You crunch the numbers on an applicant and figure that given genetics, habits, etc., she has a 2% chance of catching cancer in a given year, whose medical bills would average \$6,000. She has a 1% likelihood of developing a heart condition, which would cost an average of \$1,600. Finally, she has a 3% of some other disaster befalling her, and costing \$4,500. Should you offer her the plan?...
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