Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You, an analyst at the Animal Health Agency (AHA), must make a recommendation whether or not to ban imported pigs due to a risk of

You, an analyst at the Animal Health Agency (AHA), must make a recommendation whether or not to ban imported pigs due to a risk of importing a disease, porcine hoof blister (PHB), or to require that imported pigs be tested for the disease.

With no ban, the probability of an outbreak is known with 95% confidence to be in the range of 3.5% 1.5% and the cost of dealing with an outbreak is known with 95% confidence to be in the range of $1,000,000 $500,000 (which will ultimately be paid by the consumer).

With a ban, there will be 0% probability of transmission, but the industry will experience increased costs that are estimated with 95% confidence to be in the range of $30,00 $20,000. (These costs will also be ultimately paid by the consumer.)

You could also require a test that reduces the probability of an outbreak to 0.35% 0.15% (with 95% confidence), but increases costs by $10,000 $1,000 (95% confidence) (plus $1,000,000 $500,000 in the event of an outbreak).

Your agencys goal is to reduce the expected cost to the consumer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Skills For Accounting And Auditing Research

Authors: Shelby Collins

2nd Edition

1618530747, 9781618530745

More Books

Students also viewed these Accounting questions

Question

=+d. Word-processing software. e. Website creation software.

Answered: 1 week ago

Question

What is the relationship between bond prices and yields?

Answered: 1 week ago

Question

Was ignoring the problem an option? Why?

Answered: 1 week ago