Posterior probabilities are also called

1.   ?    conditional probabilities
2.   ?    joint probabilities
3.   ?    prior probabilities
4.   ?    revised probabilities

A theorem that enables the use of sample information to revise prior probabilities is:

1.   ?    Bayes' Theorem
2.   ?    Central Limit Theorem
3.   ?    Chebyshev's Theorem
4.   ?    None of the above

The probabilities of both sample information and a particular state of nature occurring simultaneously are called

1.   ?    conditional probabilities
2.   ?    joint probabilities
3.   ?    prior probabilities
4.   ?    revised probabilities

The probability of one event given the known outcome of a (possibly) related event is called a

1.   ?    conditional probability
2.   ?    joint probability
3.   ?    prior probability
4.   ?    revised probability

The probabilities of the states of nature prior to obtaining sample information are called

1.   ?    conditional probabilities
2.   ?    joint probabilities
3.   ?    prior probabilities
4.   ?    revised probabilities

In the following cost payoff table for a decision problem with two decision alternatives and two states of nature
States of Nature
Decision Alternative s₁ s₂
d₁ 70 30
d₂ 20 40
Suppose the decision maker obtains the probabilities P(s1) = .2 and P(s2) = .8.
What is the expected cost for decision d1?

1.   ?    30
2.   ?    36
3.   ?    38
4.   ?    70

In the following cost payoff table for a decision problem with two decision alternatives and two states of nature
States of Nature
Decision Alternative s₁ s₂
d1 70 30
d2 20 40
Suppose the decision maker obtains the probabilities P(s1) = .2 and P(s2) = .8.
What is the expected cost for decision d2?

1.   ?    30
2.   ?    36
3.   ?    38
4.   ?    70

In the following cost payoff table for a decision problem with two decision alternatives and two states of nature
States of Nature
Decision Alternative s₁ s₂
d₁ 70 30
d₂ 20 40
Suppose the decision maker obtains the probabilities P(s₁) = .2 and P(s₂) = .8.
Use the expected value approach to determine the optimal decision.

1.   ?    d₁
2.   ?    d₂

Decision analysis can be used to determine a recommended decision or an optimal decision strategy when a decision maker is faced with an uncertain and risk-filled pattern of future events.

1.   ?    True
2.   ?    False

The uncertain future events are called states of nature

1.   ?    True
2.   ?    False

The expected value of a random variable is the:

1.   ?    largest value of the variable
2.   ?    long-run average over all repeats of the experiment
3.   ?    value of the variable that occurs with the highest probability

The expected value of information that would tell the decision maker exactly which state of nature is going to occur is called the Expected Value of Sample Information.

1.   ?    True
2.   ?    False

A strategy involving a sequence of decisions and chance outcomes to provide the optimal solution to a decision problem is called a decision strategy.

1.   ?    True
2.   ?    False

An uncertain future event affecting the consequence, or payoff, associated with a decision is called a chance event.

1.   ?    True
2.   ?    False

Chance nodes are nodes indicating points where a decision is made.

1.   ?    True
2.   ?    False