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Math 180 Fall 2006 Midterm
The problem set is due Tuesday, November 7 at noon, promptly. Late papers will be penalized. Start each problem on a new page and staple the pages in order with the cover sheet provided on top.
Problem 1 (50)
A college athletic department is considering a mandatory drug testing policy for all its athletes. Suppose that the test to be used will give either a “positive” or a “negative” indication. From previous testing it is known that if the tested person is a drug user there
is a 0.92 probability that the test will be positive. (This is called the “sensitivity” of the test.) In cases where the tested person is not a drug user, there is a 0.96 probability that the test will be negative. (This is the “specificity” of the test.) Assume that 10% of the athletes to be tested are drug users.
(i) Determine the probability that a randomly selected athlete will test positive for drug use.
(ii) Assuming that a randomly selected athlete tests positive, determine the probability that he or she is actually a drug user. (iii) Assuming that a randomly selected athlete tests negative, determine the probability that he or she is actually a drug user.
iv) In light of the results above, discuss the potential advantages and disadvantages of introducing a mandatory drug testing program using this test.(From Kirkman)
Problem 2 (125)
Aba Manufacturing has contracted to provide Zyz Electronics with printed circuit (“PC”) boards under the following terms: (1) 100,000 PC boards will be delivered to Zyz in one month, and (2) Zyz has an option to take delivery of an additional 100,000 boards in three months by giving Aba 30 days notice. Zyz will pay $5.00 for each board that it purchases. Aba manufactures the PC boards using a batch process, and manufacturing costs are as follows: (1) there is a fixed setup cost of $250,000 for any manufacturing batch run, regardless of the size of the run, and (2) there is a marginal manufacturing cost of $2.00 per board regardless of the size of the batch run. Aba must decide whether to manufacture all 200,000 PC boards now or whether to only manufacture 100,000 now and manufacture the other 100,000 boards only if Zyz exercises its option to buy those boards. If Aba manufactures 200,000 now and Zyz does not exercise its option, then the manufacturing cost of the extra 100,000 boards will be totally lost. Aba believes there is a 50% chance Zyz will exercise its option to buy the additional 100,000 PC boards.
(i) Explain why it might potentially be more profitable to manufacture all 200,000 boards now.
(ii) Draw a decision tree for the decision that Aba faces.
(iii) Determine the preferred course of action for Aba assuming it uses expected profit as its decision criterion.
(iv) Determine the expected value of perfect information about whether Zyz will exercise its option.
Aba Manufacturing has now created a new option: It can conduct some research and development in an attempt to lower the expected setup cost associated with manufacturing a batch of the PC boards. This research and development would not be completed in time to influence the setup cost for the initial batch that Zyz has ordered, but would be completed before the second batch would have to be manufactured. The research and development will cost $25,000, and there is a 0.4 probability that it will be successful. If it is successful, then the expected set up cost per batch will be reduced by $200,000 to $50,000. If the research and development is not successful, then there will be no reduction in the setup cost. There will be no other benefits from the research and development besides the potential reduction in setup cost for the Zyz reorder.
( v) Using expected profit as the decision criterion, determine whether Aba should undertake the research and development.
(vi) Using expected profit as the decision criterion, determine the value of learning for certain whether the research and development will be successful before a decision has to be made about whether to initially manufacture 100,000 or 200,000 PC boards. (From Kirkman)
Problem 3 (25)
The Philadelphia Inquirer reported on February 26, that building additional fences on the Mexican-U.S. border was likely to increase the total income of guides who escort illegal immigrants (“coyotes”). Is there a limit to this principle? Would the prediction still be true if an impenetrable fence were built along the entire border? Should the answer depend on what fraction of the border is fenced and how porous the fence is? Explain in terms of supply, demand, and elasticity using carefully drawn graphs.
Problem 4 (50)
In Helling v. Carey 83 Wash. 2d 514, 519 P.2d 981 (1974), Barbara Helling sued two ophthalmologists, Thomas Carey and Robert Laughlin, for medical malpractice. The opinion reads in part,
“The plaintiff suffers from glaucoma a condition of the eye in which there is an interference in the ease with which the nourishing fluids can flow out of the eye. Such a condition results in pressure gradually rising above the normal level to such an extent that damage is produced to the optic nerve and its fibers with resultant loss of vision. The disease has few symptoms and, in the absence of a pressure test, is often undetected until the damage has become extensive and irreversible. The plaintiff first consulted the defendants for myopia, nearsightedness, in 1959.she was fitted with contact lenses additional consultations occurred·. Until the October 1968 consultation, the defendants considered the plaintiff’s visual problems to be related solely to complications associated with her contact lenses. On that occasion, the defendant, Dr. Carey, tested the plaintiff’s eye pressure. This test indicated that the plaintiff had glaucoma. The plaintiff, who was then 32 years of age, had essentially lost her peripheral vision. The defendants argue that the standard of the profession does not require the giving of a routine pressure test to persons under the age of 40·because the risk of glaucoma is so rare in this age group.” Testimony of Dr. Carey suggested the risk of glaucoma to be about 1 in 25,000 in persons under 40, and in persons over 40, from 2% to 3%. The court found for the plaintiff. “The test is a simple pressure test, relatively inexpensive. Under the facts of this case reasonable prudence required the timely giving of the pressure test to this plaintiff.”
(a)How would you approach the negligence determination using the economic approach? Assume that if a pressure test is given, it will definitely detect glaucoma and there is no other way to detect it; that the harm due to glaucoma is measured to be $1,000,000; that the cost of a pressure test is $50 (in terms of physician time and implicit
wear and tear on equipment); that the risks in the under 40 age group are 1 in 25,000 and in the over 40, group 3%.
(b)Determine how the following factor would alter your calculation. There is a danger to patients created by the pressure test. Assume that in .1% of tests, there is corneal injury causing harm of $500,000.
(c)In fact, one supposes that risk increases continuously with age. How would this affect the calculations in (a)?
(d) How would you now approach the economic analysis if 1% of the tests result in corneal injury causing harm of $500,000?
Problem 5 (50)
Buses of both Black Co. and Blue Co. travel on Main Street. Three quarters of the buses are Blue. On a dark and rainy night a bus forces a car off the road and Alice and Bob both witness the accident. Alice reports that the bus was Black, but her error rate is 15%. Bob reports that it was Blue, but his error rate is 30%. With only this information, what is the probability that the bus was Blue?
Problem 6 (25)
A computer is programmed to make 100 draws at random with replacement from the box
and to take their sum. It does this 144 times (so it makes a total of 14,400 draws). The average of the 144 sums is 21.13. The program is working fine – or is it? Choose one option (“Working fine” or “Something is wrong”) and explain your reason. (From Freidman, Pisanani, Purves, “Statistics, 3rd edition”)
Problem 7 (25)
You have flipped a coin 100 times and observed that it came up “heads” 61 times. Would you abandon the hypothesis that the coin is fair (the “null hypothesis”) in favor of the alternate hypothesis that the coin is biased? On the basis of your answer give a 95% confidence interval for the number of heads that may be expected in the next hundred tosses, i.e., numbers l (lower limit) and L (upper limit) such that if we toss the coin 100 times, in 95% of the cases the number of heads will lie between l and L.
Problem 8 (25)
Men of different marital status seem to have different distributions of labor force status. Or is this just chance variation? If there is a difference, can you suggest some possible reasons? (You may assume the table results from a simple random sample.) (From Freidman, Pisanani, Purves, “Statistics, 3rd edition”)
Each respondent in the Current Population Survey of March 1993 was classified as employed, unemployed, or outside the labor force. The results for men in California age 35—44 can be cross-tabulated by marital status as follows
Married / Never MarriedEmployed / 679 / 103 / 114
Unemployed / 63 / 10 / 20
Not in Labor Force / 42 / 18 / 25
Problem 9 (125)
The distribution of eligible jurors in a certain district is 1/4 African-American, 1/3 Latino, and 5/12 Caucasian. By law, venires (the pools which must show up at the courthouse and from which the jurors are drawn) must be selected at random from the population of potentially eligible jurors. However, both defense and the prosecution may challenge potential jurors for cause (e.g., being a relative of the defendant or married to a police officer) and generally also get a limited number of “peremptory” challenges where no cause need be shown. In 20 successive criminal cases tried to 12- person juries this was the distribution of jurors.
Group/Trial / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / 13 / 14 / 15 / 16 / 17 / 18 / 19 / 20Caucasian / 7 / 4 / 7 / 5 / 9 / 5 / 6 / 3 / 7 / 6 / 6 / 7 / 8 / 5 / 7 / 4 / 7 / 6 / 9 / 5
Latino / 2 / 4 / 2 / 4 / 3 / 4 / 1 / 5 / 4 / 3 / 5 / 2 / 4 / 3 / 2 / 4 / 4 / 5 / 2 / 4
African-American / 3 / 4 / 3 / 3 / 0 / 3 / 5 / 4 / 1 / 3 / 1 / 3 / 0 / 4 / 3 / 4 / 1 / 1 / 1 / 3
In the next 20 trials this was the distribution.
Group/Trial / 21 / 22 / 23 / 24 / 25 / 26 / 27 / 28 / 29 / 30 / 31 / 32 / 33 / 34 / 35 / 36 / 37 / 38 / 39 / 40Caucasian / 5 / 4 / 6 / 5 / 7 / 5 / 4 / 3 / 5 / 6 / 4 / 7 / 6 / 5 / 5 / 4 / 5 / 6 / 7 / 5
Latino / 4 / 4 / 3 / 4 / 5 / 4 / 3 / 5 / 4 / 3 / 5 / 2 / 4 / 3 / 3 / 4 / 4 / 5 / 3 / 4
African-American / 3 / 4 / 3 / 3 / 0 / 3 / 5 / 4 / 3 / 3 / 3 / 3 / 2 / 4 / 4 / 4 / 3 / 1 / 2 / 3
After trial #20 a Caucasian convicted in trial #5 appealed. After trial #40 an African-American convicted in Trial #27 appealed. Setting aside any other possible grounds, what could you say on the basis of these figures alone? What would be the argument for the prosecution (which wants to preserve the convictions)? What would be the argument for the defense? Are there any ways of looking at these figures which would be better for one party than the other, for example, by consolidating some of the categories? Is there evidence for a change in the method of jury selection after Trial #20? (You might be interested in reading Castaneda v. Partida, which you can look up on the web.) For your convenience here is a table of χ² probabilities which may be better for this problem than the one distributed in class because it also gives the breakpoints for values of p close to 1. The areas given across the top are the areas to the right of the critical value. To look up an area on the left, subtract it from one, and then look it up (i.e.: 0.05 on the left is 0.95 on the right)
Breakpoints for χ²
Examples of how to read this table: With 2 degrees of freedom, the probability that χ² will exceed 11.345 is .01; so large a χ² with df = 2 is thus relatively rare. With 20 degrees of freedom the probability that χ² will exceed 7.434 is 0.995. Equivalently, the probability that with df = 20 the value of χ²does not exceed 7.434 is only .005; so small a χ² with df = 20 is thus quite rare.)
df / 0.995 / 0.99 / 0.975 / 0.95 / 0.90 / 0.10 / 0.05 / 0.025 / 0.01 / 0.0051 / --- / --- / 0.001 / 0.004 / 0.016 / 2.706 / 3.841 / 5.024 / 6.635 / 7.879
2 / 0.010 / 0.020 / 0.051 / 0.103 / 0.211 / 4.605 / 5.991 / 7.378 / 9.210 / 10.597
3 / 0.072 / 0.115 / 0.216 / 0.352 / 0.584 / 6.251 / 7.815 / 9.348 / 11.345 / 12.838
4 / 0.207 / 0.297 / 0.484 / 0.711 / 1.064 / 7.779 / 9.488 / 11.143 / 13.277 / 14.860
5 / 0.412 / 0.554 / 0.831 / 1.145 / 1.610 / 9.236 / 11.070 / 12.833 / 15.086 / 16.750
6 / 0.676 / 0.872 / 1.237 / 1.635 / 2.204 / 10.645 / 12.592 / 14.449 / 16.812 / 18.548
7 / 0.989 / 1.239 / 1.690 / 2.167 / 2.833 / 12.017 / 14.067 / 16.013 / 18.475 / 20.278
8 / 1.344 / 1.646 / 2.180 / 2.733 / 3.490 / 13.362 / 15.507 / 17.535 / 20.090 / 21.955
9 / 1.735 / 2.088 / 2.700 / 3.325 / 4.168 / 14.684 / 16.919 / 19.023 / 21.666 / 23.589
10 / 2.156 / 2.558 / 3.247 / 3.940 / 4.865 / 15.987 / 18.307 / 20.483 / 23.209 / 25.188
11 / 2.603 / 3.053 / 3.816 / 4.575 / 5.578 / 17.275 / 19.675 / 21.920 / 24.725 / 26.757
12 / 3.074 / 3.571 / 4.404 / 5.226 / 6.304 / 18.549 / 21.026 / 23.337 / 26.217 / 28.300
13 / 3.565 / 4.107 / 5.009 / 5.892 / 7.042 / 19.812 / 22.362 / 24.736 / 27.688 / 29.819
14 / 4.075 / 4.660 / 5.629 / 6.571 / 7.790 / 21.064 / 23.685 / 26.119 / 29.141 / 31.319
15 / 4.601 / 5.229 / 6.262 / 7.261 / 8.547 / 22.307 / 24.996 / 27.488 / 30.578 / 32.801
16 / 5.142 / 5.812 / 6.908 / 7.962 / 9.312 / 23.542 / 26.296 / 28.845 / 32.000 / 34.267
17 / 5.697 / 6.408 / 7.564 / 8.672 / 10.085 / 24.769 / 27.587 / 30.191 / 33.409 / 35.718
18 / 6.265 / 7.015 / 8.231 / 9.390 / 10.865 / 25.989 / 28.869 / 31.526 / 34.805 / 37.156
19 / 6.844 / 7.633 / 8.907 / 10.117 / 11.651 / 27.204 / 30.144 / 32.852 / 36.191 / 38.582
20 / 7.434 / 8.260 / 9.591 / 10.851 / 12.443 / 28.412 / 31.410 / 34.170 / 37.566 / 39.997
21 / 8.034 / 8.897 / 10.283 / 11.591 / 13.240 / 29.615 / 32.671 / 35.479 / 38.932 / 41.401
22 / 8.643 / 9.542 / 10.982 / 12.338 / 14.041 / 30.813 / 33.924 / 36.781 / 40.289 / 42.796
23 / 9.260 / 10.196 / 11.689 / 13.091 / 14.848 / 32.007 / 35.172 / 38.076 / 41.638 / 44.181
24 / 9.886 / 10.856 / 12.401 / 13.848 / 15.659 / 33.196 / 36.415 / 39.364 / 42.980 / 45.559
25 / 10.520 / 11.524 / 13.120 / 14.611 / 16.473 / 34.382 / 37.652 / 40.646 / 44.314 / 46.928
26 / 11.160 / 12.198 / 13.844 / 15.379 / 17.292 / 35.563 / 38.885 / 41.923 / 45.642 / 48.290
27 / 11.808 / 12.879 / 14.573 / 16.151 / 18.114 / 36.741 / 40.113 / 43.195 / 46.963 / 49.645
28 / 12.461 / 13.565 / 15.308 / 16.928 / 18.939 / 37.916 / 41.337 / 44.461 / 48.278 / 50.993
29 / 13.121 / 14.256 / 16.047 / 17.708 / 19.768 / 39.087 / 42.557 / 45.722 / 49.588 / 52.336
30 / 13.787 / 14.953 / 16.791 / 18.493 / 20.599 / 40.256 / 43.773 / 46.979 / 50.892 / 53.672
40 / 20.707 / 22.164 / 24.433 / 26.509 / 29.051 / 51.805 / 55.758 / 59.342 / 63.691 / 66.766
50 / 27.991 / 29.707 / 32.357 / 34.764 / 37.689 / 63.167 / 67.505 / 71.420 / 76.154 / 79.490
60 / 35.534 / 37.485 / 40.482 / 43.188 / 46.459 / 74.397 / 79.082 / 83.298 / 88.379 / 91.952
70 / 43.275 / 45.442 / 48.758 / 51.739 / 55.329 / 85.527 / 90.531 / 95.023 / 100.425 / 104.215
80 / 51.172 / 53.540 / 57.153 / 60.391 / 64.278 / 96.578 / 101.879 / 106.629 / 112.329 / 116.321
90 / 59.196 / 61.754 / 65.647 / 69.126 / 73.291 / 107.565 / 113.145 / 118.136 / 124.116 / 128.299
100 / 67.328 / 70.065 / 74.222 / 77.929 / 82.358 / 118.498 / 124.342 / 129.561 / 135.807 / 140.169