A doctor faces a dilemma, and you, as a risk analyst, must help her out. If...

 

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A doctor faces a dilemma, and you, as a risk analyst, must help her out. If the doctor feels a patient has an 80% or greater chance of having a certain disease, she always recommends surgery. In cases where her certainty is not as great, she recommends a series of expensive and painful tests. These tests for the disease always return a positive result when the patient has the disease. For a person without the disease, it almost never returns a false positive result. For a particular patient, the doctor feels the probability of him having the disease is 60%. However, at the last moment, he informs her that he is a diabetic. While this information does not change her estimate of the probability of him having the disease, it means that in 30% of cases of diabetic people without the disease, the test returns a positive result. What should she do? Explain your answer and show your work. A doctor faces a dilemma, and you, as a risk analyst, must help her out. If the doctor feels a patient has an 80% or greater chance of having a certain disease, she always recommends surgery. In cases where her certainty is not as great, she recommends a series of expensive and painful tests. These tests for the disease always return a positive result when the patient has the disease. For a person without the disease, it almost never returns a false positive result. For a particular patient, the doctor feels the probability of him having the disease is 60%. However, at the last moment, he informs her that he is a diabetic. While this information does not change her estimate of the probability of him having the disease, it means that in 30% of cases of diabetic people without the disease, the test returns a positive result. What should she do? Explain your answer and show your work.

Answer rating: 100% (QA)

SOLUTION To solve this problem we need to use Bayes theorem which allows us to update our belief about the probability of an event based on new information or evidence Lets define the following events ... View the full answer