Question

3. (10 points) Two antibiotics are available as treatment for a common ear infection in children Antibiotic A: A is known to effectively cure the infection 60% of the time. Cost is $50 Antibiotic B: B is known to effectively cure the infection 90% of the time. Cost is $80. The antibiotics work independently one another. A health insurance company intends to recommend one of the following two plans Plan I: treat with antibiotic A first. If it is not effective, then treat with antibiotic B Plan II: treat with antibiotic B first. If it is not effective, then treat with antibiotic A a. If the doctor treats a child with an ear infection using plan I, what is the probability of cure? If the doctor treats a child with an ear infection using plan II, what is the probability of cure? b. Compute the expected cost per child when plan I is used for treatment. Compute the expected cost per child when plan II is used for treatment c. Based on your results, which plan would you recommend? Explain why

          3. (10 points) Two antibiotics are available as treatment for a common ear infection in children

Antibiotic A: A is known to effectively cure the infection 60% of the time. Cost is $50
Antibiotic B: B is known to effectively cure the infection 90% of the time. Cost is $80.

The antibiotics work independently one another. A health insurance company intends to recommend
one of the following two plans

Plan I: treat with antibiotic A first. If it is not effective, then treat with antibiotic B
Plan II: treat with antibiotic B first. If it is not effective, then treat with antibiotic A

a. If the doctor treats a child with an ear infection using plan I, what is the probability of cure? If the
doctor treats a child with an ear infection using plan II, what is the probability of cure?
b. Compute the expected cost per child when plan I is used for treatment. Compute the expected cost
per child when plan II is used for treatment
c. Based on your results, which plan would you recommend? Explain why

3. (10 points) Two antibiotics are available as treatment for a common ear infection in children

Antibiotic A: A is known to effectively cure the infection 60% of the time. Cost is $50
Antibiotic B: B is known to effectively cure the infection 90% of the time. Cost is $80.

The antibiotics work independently one another. A health insurance company intends to recommend
one of the following two plans

Plan I: treat with antibiotic A first. If it is not effective, then treat with antibiotic B
Plan II: treat with antibiotic B first. If it is not effective, then treat with antibiotic A

a. If the doctor treats a child with an ear infection using plan I, what is the probability of cure? If the
doctor treats a child with an ear infection using plan II, what is the probability of cure?
b. Compute the expected cost per child when plan I is used for treatment. Compute the expected cost
per child when plan II is used for treatment
c. Based on your results, which plan would you recommend? Explain why

Added by Cassandra G.

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