Given probabilities of production share:
This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.

ScanSolve AI Answer
Step 1: Define the events and probabilities. Let be the events that an item is produced by machine 1, 2, or 3, respectively. Let be the event that an item is defective.
Given probabilities of production share:
Given defect rates (conditional probabilities):
Step 2: Calculate the probability of an item being defective from each machine. We need to find for each machine. This represents the proportion of all items that are defective and come from a specific machine. For : For : For :
Step 3: Determine which machine is most likely to have produced a defective item. We are looking for , which is the probability that a defective item came from machine . According to Bayes' Theorem: The denominator is the total probability of an item being defective, which is the sum of the probabilities calculated in Step 2: To find which machine is most likely, we need to compare , , and . Since is the same for all of them, the machine with the largest will have the largest .
Comparing the values from Step 2:
The largest value is , which corresponds to machine . Therefore, machine is most likely to have produced the defective item.
Let's calculate the exact probabilities for completeness:
Machine has the highest probability.
Step 4: Evaluate the given options. A. All machines are equally likely, because the item is already known to be defective. (Incorrect) B. , because it has the lowest defect rate. (Incorrect, is the least likely) C. , because its defect rate is in the middle. (Incorrect) D. , because it has the highest defect rate and also the largest production share. (Correct, has (highest) and (largest production share), which together lead to the highest probability of producing a defective item.)
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