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Old 08-05-2007   #1
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Default probability (expected value) help pls...?

R={test result is positive}, D={person has the disease}.Assume that for a randomly selected person, P(D) = 0.02, P(R|D) = 1, P(R| not D) = 0.05, so that the inexpensive test only gives false positive, and not false negative, results.Suppose that this inexpensive test costs $10. If a person tests positive then they are also given a more expensive test, costing $100, which correctly identifies all persons with the disease . What is the expected cost per person if a population is tested for the disease using the inexpensive test followed, if necessary, by expensive test?
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