In Istanbul It Rains on 25% of Days

question 7

Multiple Choice

In Istanbul it rains on 25% of days. A small retailer knows that on rainy days her profits are usually low (Pr(L) =0.7) but when it is not rainy she is much more likely to make good profits (Pr(L) =0.2) . On average, what are the chances that she makes a good profit on any given day (give answer as percentage, 1 decimal place) ?

• A) 32.5%
• B) 35.0%
• C) 37.5%
• D) 40.0%

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Definitions:

Yea-sayer

A person who tends to agree with or say 'yes' to everything, often without critical consideration.

Correct Rejections

In signal detection theory, instances where a non-signal is correctly identified as not being present.

False Alarms

Instances in signal detection theory where a signal is perceived to be present when it is not, leading to incorrect or mistaken responses.

Sensory Adaptation

A psychological phenomenon where the sensitivity to a stimulus decreases over time when the stimulus is constantly present.