A Random Person Is Selected from a Large Population in Which

question 74

Multiple Choice

A random person is selected from a large population in which 5% are users of a dangerous illegal drug.A drug test that correctly identifies users 99% of the times and nonusers 95% of the time is administered to this individual and gives a positive result.What is the probability that this individual is actually a user of this drug?

• A)0.99
• B)0.94
• C)0.61
• D)0.53
• E)0.51

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Definitions:

Demand Fluctuations

Variations in customer demand for products or services over a certain period of time.

Net Receivables

The total money owed to a company by its customers minus any provisions for bad debt.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Total Revenue

The total amount of money generated by a company from its business activities, primarily through the sale of goods and services, before any expenses are deducted.