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The level of demand affects the success of both

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Unformatted text preview: nt. On the other hand, only 130 of the 1300 insured drivers 25 years or older had been involved in at least one automobile accident. What is the probability that an insured driver of any age will be involved in an accident? A. 35% B. 20.5% C. 65% D. 68.3% E. 79.5% 36. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman not being pregnant when the test results indicate pregnancy. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested non-pregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed pregnancy. What is the probability that she is not pregnant? A. 90% B. 0.9% C. 8.3% D. 91.7% E. 10.85% 1-1879 Chapter 01 - An Introduction to Business Statistics 37. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman actually being pregnant when the test results indicate that she is not pregnant. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested nonpregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed that she is not pregnant. What is the probability that she is pregnant? A. 1% B. 0.9% C. 0.05% D. 8.3% E. 0.056% 38. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above 1-1880 Chapter 01 - An Introduction to Business Statistics 39. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above 40. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above 1-1881 Chapter 01 - An Introduction to Business Statistics 41. In utility analysis, a utility curve that shows a rapid increase in utility for initial amounts of money followed by a gradual leveling off for larger amount of money is appropriate for a risk _____ decision maker. A. Seeking B. Averse C. Neutral D. None of the above 42. __________________ statistics is an area of statistics that uses Bayes' theorem to update prior belief about a probability or population parameter to a posterior belief. A. Bayesian B. Utility theory C. Pre-posterior analysis D. Risk theory 43. The _____________ criterion finds the best possible payoff for each alternative and then chooses the alternative that yields the maximum payoff. A. Maximin B. Certainty C. Maximax D. Decision 44. The _____________ criterion finds the best possible payoff for each alternative and then chooses the alternative that yields the maximum payoff. A. Maximin B. Certainty C. Maximax D. Decision 1-1882 Chapter 01 - An Introduction to Business Statistics 45. The ____________________ criterion for choosing among alternative actions assumes that the state of nature with the worst payoff will be experienced. A. Maximin B. Certainty C. Maximax D. Decision 46. The ____________________ criterion for choosing among alternative actions assumes that the state of nature with the best payoff will be experienced. A. Maximin B. Certainty C. Maximax D. Decision 47. A corn farmer has categorized the weather into three possible levels. The weather conditions will affect the timing of the harvest and the associated payoff. In this situation, the weather conditions is called the ____________________________. A. Alternatives B. States of nature C. Payoffs D. Perfect information 48. Decision-makers in business organizations make most decisions in environments that involve some degree of ___________________. A. Risk B. Utility C. Certainty D. Uncertainty 1-1883 Chapter 01 - An Introduction to Business Statistics 49. When making a decision in an environment of ________________, the decision maker knows which of the states of nature will actually occur. A. Risk B. Utility C. Certainty D. Uncertainty 50. A tire manufacturer needs to make a decision about the amount of production for the coming month (high vs. low). The level of production largely depends on the level of demand. For this situation, the amount of production constitutes the ___________________ actions. A. Alternative B. Utility C. Certainty D. Uncertainty 51. _______________________ is a diagram that assists the decision maker in analyzing a decision problem. A. Bayes Theorem B. Decision tree C. Utility curve D. Maximax 52. In the application of Bayes' theorem the sample information is combined with prior probabilities to obtain ___________________ probabili...
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This document was uploaded on 01/20/2014.

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