Question
1, Dmitri, a college student going on a cruise over spring break, must decide whether to enter a contest to win free scuba equipment with
1, Dmitri, a college student going on a cruise over spring break, must decide whether to enter a contest to win free scuba equipment with unlimited free scuba dives. Assume Dmitri knows the amount of the contest entrance fee, the price of a scuba dive, and the price to rent the scuba equipment.For each of the following components of Dmitri's decision, select whether the item is a possible decision alternative, a state of nature, or a payoff/cost. (Note:In some cases, more than one monetary value contributes to a payoff. Classify any value that contributes to a payoff as a payoff.)
MS. Taylor's Incomplete decision tree looks like this: User 0 + Result C 3 A Nonuser $1,000 D Test 2 User $500 - Result E 4 B Nonuser 0 F 1 User $500 Don't Test G 5 Nonuser 0 HFor the tree to be useful as a decision-making tool, branch probabilities are required. You are a work-study student in Ms. Taylor's ofce, and since you are taking a statistics course, she asks you to compute the branch probabilities for the decision tree. Let D = the student athlete is a drug user, N = the student athlete is not a drug user, + = the drug test gives a positive result, and = the drug test gives a negative result. You decide to conne your analysis to ephedrine use by football players at Green Hill. In a 2005 study of substance use by student athletes conducted by the NCAA, 4.2% of football players reported using ephedrine. You make the assumption that the prevalence of ephedrine use by Green Hi|| football players is no different from that found in the NCAA study. Based on information provided by the lab that would perform the tests, the test for ephedrine is 95% reliable in both directions: P(+|D) = 0.95, and P(|N) = 0.95. He enters the contest V He does not enter the contest Alternatlve act Payoff He wins the contest State of nature He does not win the contest Amount of the contest entrance fee V Price of a scuba dive v Price to rent the scuba equipment V Suppose you develop a decision tree for Dmitri's decision. In your tree you include a branch labeled \"Enter Contest\" and a branch labeled \"Don't Enter." This pair of branches leaves a node that you should draw as a V , because it is v node.Step by Step Solution
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