Math Problem Statement
Billy is deciding whether or not to have surgery. If he has the surgery, there is a 0.9 chance that he will recover full health and al).1 chance that the surgery will have no effect on his condition. For Billy, having the surgery and thereby recovering full health has utility 100. Moreover, for Billy, having the surgery and this having no effect on his condition has utility -50. For Billy, what is the expected utility of having the surgery? (Please answer with a number rounded to three decimal places rather than with a fraction, e.g. 0.111 rather than 1/9).
Solution
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Math Problem Analysis
Mathematical Concepts
Probability
Expected Value
Utility Theory
Formulas
Expected Value formula
Theorems
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Suitable Grade Level
Undergraduate
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