Consider the Probabilities of People Taking HIV Tests

question 35

Multiple Choice

Consider the probabilities of people taking HIV tests. Assume that the true probability of having HIV for all people who take the test is 4%. If HIV tests give a positive result in 99% of the cases in which the person has HIV and give a negative result in 99% of the cases in which the person does not have HIV, what is the probability that a person who gets a positive test result does not have HIV?

• A) 0.125
• B) 0.155
• C) 0.165
• D) 0.195

Explain the functions and importance of legal reserve requirements in monetary policy.

Discuss the significance of the lender of last resort function of the Federal Reserve.

Understand the concept and application of net present value in capital budgeting.

Grasp the significance of the time value of money in financial decision-making.

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Definitions:

Price-Fixing

An illegal agreement among competitors to set prices at a certain level, rather than letting them be determined naturally by supply and demand.

Economic Efficiency

A state in which resources are allocated in a way that maximizes the production of goods and services at the lowest cost, while achieving the highest possible welfare or utility.

Negative Externalities

Costs experienced by third parties due to the actions of others that are not reflected in market prices.

Clayton Act

A U.S. antitrust law, adopted in 1914, aimed at protecting competition by prohibiting certain actions that lead to anticompetitiveness.