BUS105: Firms are Increasingly Asking Applicants to Submit to Drug Tests Suppose that Drug Tests can Identify a Drug user 99% of the Time : Statistics Assignment, SUSS, Singapore

Firms are increasingly asking applicants to submit to drug tests. Suppose that drug tests can identify a drug user 99% of the time. However, 2% of the time the test indicates a positive result although the applicant is not a drug user.

Based on past experiences, 5% of all applicants are drug users. a) What is the probability that a randomly selected applicant has tested positive for drug use? b) What is the probability that an applicant who has tested positive is not really a drug user? c) What is the probability that an applicant who has tested negative is really a drug user? d) In a group of 3 applicants with positive results, what is the probability one of them is really a drug user?