10.1 For every 100 taxis in a dark alley, 15 will be green, 85 blue. The witness...
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10.1 For every 100 taxis in a dark alley, 15 will be green, 85 blue. The witness will identify 0.8(15) = 12 of the green taxis as green, the remaining 3 green taxis as blue; he will identify 0.8(85) = 68 of the blue taxis as blue, the remaining 17 blue taxis as green. The probability that the cab in question was green, given that the witness said it was, is thus equal to 12/(12 + 17) = 0.413 and as this is less than half, the Green Taxi Company should not be held liable. (LO1)
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Related Book For
Principles Of Microeconomics
ISBN: 9781264250387,9781264250448
8th Edition
Authors: Robert H. Frank , Ben Bernanke , Kate Antonovics , Ori Heffetz
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