Q1) Let following payoff matrix.
|
State of nature
|
|
Decision
|
1
|
2
|
3
|
|
A
|
50
|
75
|
35
|
|
B
|
40
|
50
|
60
|
|
C
|
40
|
35
|
30
|
Must a decision maker ever choose decision alternative C? Describe your answer.
2) Describe the meaning of alternatives, criteria and states of nature. How are they utilized in decision analysis?
3) Give a personal example of when and how you could have used decision analysis to help in making decision.
4) Researchers have claimed that average number of headaches per student in a semester of Statistics is 12. Statistics students believe average is higher. In sample of n = 16 students mean is 14 headaches with deviation of 1.5. Which of given represent null and alternative hypotheses essential to test the students' belief?
a) H0: μ = 12 vs. Ha: μ > 12
b) H0: μ = 12 vs. Ha: μ < 12
c) H0: μ = 12 vs. Ha: μ ≠ 12
d) H0: μ < 12 vs. Ha: μ = 12