1. The equation P(A|B) = P(AB)/P(B) is the marginal probability. the formula for

Question

1.  The equation P(A|B) = P(AB)/P(B) is

the marginal probability.

the formula for a conditional probability.

the formula for a joint probability.

only relevant when events A and B are collectively exhaustive.

None of these

  

As Nick does not know how his product will be received, he assumes that all three states of nature are equally likely to occur. If he uses the equally likely criterion, what decision would he make?

Open 1

Open 2

Good market

Fair market

Do nothing

the marginal probability.

the formula for a conditional probability.

the formula for a joint probability.

only relevant when events A and B are collectively exhaustive.

None of these

  

• 2.  Which of the following is not considered a criteria for decision making under uncertainty?
  
• 
  

optimistic pessimistic equally likely random selection minimax regret

• 3.  Suppose that 10 golfers enter a tournament and that their respective skill levels are approximately the same. Six of the entrants are female and two of those are older than 40 years old. Three of the men are older than 40 years old. What is the probability that the winner will be a female who is older than 40 years old?
  
• 
  

0.000 1.100 0.198 0.200 0.900

• 4.  Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has prepared a payoff table to help analyze the situation.

Alternatives      States of Nature
                         Good Market          Fair Market        Poor Market
Open 1           380 000                  70 000                 -400000 Open 2           200000                    80 000                -200000 Do nothing       0                                 0                             0

As Nick does not know how his product will be received, he assumes that all three states of nature are equally likely to occur. If he uses the equally likely criterion, what decision would he make?

Open 1

Open 2

Good market

Fair market

Do nothing

5.  

• At a university with 1,000 business majors, there are 200 business students enrolled in an introductory statistics course. Of these 200 students, 50 are also enrolled in an introductory accounting course. There are an additional 250 business students enrolled in accounting but not enrolled in statistics. If a business student is selected at random, what is the probability that the student is either enrolled in accounting or statistics, but not both?
  

0.45 0.50 0.40 0.05 None of these

• 6.  A production process is known to produce a particular item in such a way that 5 percent of these are defective. If two items are randomly selected as they come off the production line, what is the probability that the second item will be defective?
  
• 
  

0.05 0.005 0.18 0.20 None of these

• 7.  The Hurwicz criterion coefficient of realism measures the decision maker's degree of ________.
  
• 
  

utility pessimism certainty optimism regret

• 8.  In decision making under ________, there are several possible outcomes for each alternative, and the decision maker knows the probability of occurrence of each outcome.
  
• 
  

risk utility certainty probability uncertainty

• 9.  A(n) ________ is a representation of reality or a real-life situation.
  
• 
  

objective model analysis algorithm None of these

• 10.  A healthcare executive is using regression to predict total revenues. She has decided to include both patient length of stay and insurance type in her model. Insurance type can be grouped into the following categories: Medicare, Medicaid, Managed Care, Self-Pay, and Charity. Which of the following is true?
  
• 
  

Insurance type will be represented in the regression model by five binary variables. Insurance type will be represented in the regression model by six dummy variables. Insurance type will be represented in the regression model by five dummy variables. Insurance type will be represented in the regression model by four binary variables. Neither binary nor dummy variables are necessary for the regression model.

• 11.  In the construction of decision trees, which of the following shapes represents a decision node?
  
• 
  

square circle diamond triangle None of these

• 12.   At a university with 1,000 business majors, there are 200 business students enrolled in an introductory statistics course. Of these 200 students, 50 are also enrolled in an introductory accounting course. There are an additional 250 business students enrolled in accounting but not enrolled in statistics. If a business student is selected at random, what is the probability that the student is enrolled in both statistics and accounting?
  
• 
  

0.05 0.06 0.20 0.25 None of these

Explanation / Answer

1-

the formula for a conditional probability.

2-

3-

4-

Fair market

5-

6-

7-

8-

9-

10-

11-

12-

the formula for a conditional probability.

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