The Expected Value of Test Information Is

question 14

Multiple Choice

The expected value of test information is:

• A) zero if the new information does not change the firm's decisions.
• B) the difference between the actual outcome with test information and without it.
• C) the sum of the expected value with the information and without it.
• D) the expected value of the decision taken using the test.
• E) the same as the expected value of the decision taken without the test.

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that is required to be detected at least 50% of the time by a subject.

Difference Threshold

The minimum noticeable difference that a person can detect between two stimuli 50% of the time; also known as the just noticeable difference (JND).

Just Noticeable Difference

The smallest difference in a stimulus that an organism can barely perceive.

Difference Threshold

The minimum difference in stimulation that an individual can detect 50% of the time, also known as the just noticeable difference (JND).