psychic will tell you the sex of the unborn child from any photograph of the mother. Cost is $ 40. If the psychic guesses right he or she is going to keep all the money. But if psychic does not guess right he or she promises to give the $40 back and pay in addition $30 out of her pocket as a compensation for the wrong answer. Assume postage fees for the return mail are zero. Boy Probability is 0.51 and Girl Probability is 0.49. A) Suppose the psychic replies "boy" to all inquiries. In the worst case, everyone who has a girl will ask for her money back. Use the expected value equation to estimate the expected profit per inquiry. B) Suppose that the psychic replies "girl" to all inquiries. What is the expected profit per inquiry? C) Suppose the psychic chooses randomly the sex of the child. For example it may choose "boy" in all inquiries in one day and "girl" in the next day. What is the expected profit per inquiry in this case?
psychic will tell you the sex of the unborn child from any photograph of the mother. Cost is $ 40. If the psychic guesses right he or she is going to keep all the money. But if psychic does not guess right he or she promises to give the $40 back and pay in addition $30 out of her pocket as a compensation for the wrong answer. Assume postage fees for the return mail are zero. Boy Probability is 0.51 and Girl Probability is 0.49.
A) Suppose the psychic replies "boy" to all inquiries. In the worst case, everyone who has a girl will ask for her money back. Use the expected value equation to estimate the expected profit per inquiry.
B) Suppose that the psychic replies "girl" to all inquiries. What is the expected profit per inquiry?
C) Suppose the psychic chooses randomly the sex of the child. For example it may choose "boy" in all inquiries in one day and "girl" in the next day. What is the expected profit per inquiry in this case?
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