You are about to drive to your cottage. If your car\'s engine is out of tune, yo
ID: 3235109 • Letter: Y
Question
You are about to drive to your cottage. If your car's engine is out of tune, your gas cost will increase by $100. Having the engine tested will cost $20. If it is out of tune, repairs will cost $60. Before testing, the probability is 30% that the engine is out of tune. The table below gathers the information you need to make a decision (except for X which you must compute yourself.) Determine wheather you should have the engine tested or not.
Test Engine condition out of tune okay yes $80 $20 no 100 0 probibility 0.30 XExplanation / Answer
EMV (test)=$0.30*80+0.70*20=38$
EMV (no test)=$0.30*100+0.70*0
=$30
therfore,
it seems that,the test is not advisable... because $30 is less than $38
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