Question

How to solve the cost in this problem?

Suppose two drugs are routinely used for treatment of a particular kidney disorder. Drug 1 is known to cure the disease 85% of the time and costs $90. Drug 2 is known to cure the disease 70% of the time and costs $65. The two drugs work independent of each other (that is, administration of one has no effect on the efficacy of the other). The two treatment plans are as follows:

Plan A: Treatment with Drug 1—if not effective, treatment with Drug 2.
Plan B: Treatment with Drug 2—if not effective, treatment with Drug 1.

Which statement is most correct? @amistre64

Answer 1

1 Based on the overall probability of a cure, Plan A should be selected over Plan B.

2 Based on the overall probability of a cure, Plan B should be selected over Plan A.

3 Based on the overall cost of treatment, Plan A should be selected over Plan B.

4 Based on the overall cost of treatment, Plan B should be selected over Plan A.

5 Based on the probability of a cure and the cost of treatment, both plans are equivalent, so either can be selected.

Not 1 or 2 because both plans leave the same amount of people uncured. I just need to find out the cost of each plan to choose an answer.

Answer 2

we coverd this before

what criteria are we basing a choice on?

in the other problem it was cost analysis; insurance people care about costs

in this one it doesnt provide an analysis option; cost or benefits? which one?

Answer 3

All I need to answer the question is to find out the cost of plan a and plan b. I don't know how to find out the cost.

Answer 4

if cost: then consider the cost to you personally

you start one, so you have to pay for it regardless, but if it fails, then you have the probability that it fails of paying for the other one.

so the expected costs are: $X + P(notX)*$Y

Answer 5

to find out the cost i have to use $X + P(notX)*$Y. I'm not sure how to set that up.

Answer 6

if we table it up, this might be possible outcomes