Chapter 19 - STATISTICS FOR BUSINESS & ECONOMICS by Paul Newbold
```*****************************************************************************
* CHAPTER 19 - STATISTICS FOR BUSINESS & ECONOMICS, 4th Ed., by Paul Newbold*
*****************************************************************************
*
* Example 19.1, page 785 to Example 19.2, page 788
*
* Read these sections and examples carefully.  Be sure you understand the
* methodology.
*
*-----------------------------------------------------------------------------
* Example 19.3, page 793
*
* The GEN1 command is used to generate the Expected Monetary Value, EMV.
*
GEN1 EMV=0.6*2500+0.2*500+0.2*-1000
PRINT EMV
*
DELETE / ALL
*
*-----------------------------------------------------------------------------
* Example 19.4, page 794
*
* The Expected Monetary Value from marketing the drug is:
*
GEN1 EMVDRUG=0.5*170000+0.5*80000
PRINT EMVDRUG
*
* The Expected Monetary Value of retaining the patent is:
*
GEN1 EMVRET=0.6*125000+0.4*(-10000)
PRINT EMVRET
*
DELETE / ALL
*
*-----------------------------------------------------------------------------
* Example 19.5, page 801
*
* The GEN1 command is used to generate the constants.
*
GEN1 S1=0.6
GEN1 S2=0.4
GEN1 PS1=0.6
GEN1 PS2=0.3
GEN1 NS1=0.4
GEN1 NS2=0.7
*
* The GEN1 command is used to calculate the posterior probability for the
* state S1 given that the preliminary test is positive.
*
GEN1 S1P=(PS1*S1)/((PS1*S1)+(PS2*S2))
*
* The posterior probabilities for S1 and S2 sum to 1.  Thus, the posterior
* probability for the state S2 can be easily calculated with the GEN1
* command.
*
GEN1 S2P=1-S1P
PRINT S1P S2P
*
* The GEN1 command is used to calculate the Expected Monetary Value, EMVSOLD,
* if the patent is sold given that the initial test result is positive:
*
GEN1 EMVSOLD1=S1P*50000+S2P*50000
*
* Next the GEN1 command is used to calculate the Expected Monetary Value,
* EMVRET1, if the patent is retained given that the initial test result is
* positive.
*
GEN1 EMVRET1=S1P*125000+S2P*(-10000)
PRINT EMVSOLD1 EMVRET1
*
* The GEN1 command is used to calculate the posterior probability for the
* state S1 given that the preliminary test is negative.
*
GEN1 S1N=(NS1*S1)/((NS1*S1)+(NS2*S2))
*
* The posterior probabilities of S1 and S2 sum to 1.  Thus, the posterior
* probability for the state S2 can be easily calculated with the GEN1
* command.
*
GEN1 S2N=1-S1N
PRINT S1N S2N
*
* The GEN1 command is used to calculate the Expected Monetary Value, EMVSOLD2,
* if the patent is sold given that the initial test result is negative.
*
GEN1 EMVSOLD2=S1N*50000+S2N*50000
*
* Next, the GEN1 command is used to calculated the Expected Monetary Value,
* EMVRET2, if the patent is retained given that the initial test result is
* negative.
*
* Note:  The value for EMVRET2 will be slightly different than that printed
*        in the textbook since SHAZAM used 7 significant digits in the
*        calculation and the textbook used 4 significant digits.
*
GEN1 EMVRET2=S1N*125000+S2P*(-10000)
PRINT EMVSOLD2 EMVRET2
*
DELETE / ALL
*
*-----------------------------------------------------------------------------
*
STOP
```