The article "Uncertainty and Climate Change" (G. Heal and B. Kriström, Environmental and Resource Economics, 2002:3–39) considers three scenarios, labeled A, B, and C, for the impact of global warming...

Extracted text: The article "Uncertainty and Climate Change" (G. Heal and B. Kriström, Environmental and Resource Economics, 2002:3–39) considers three scenarios, labeled A, B, and C, for the impact of global warming on income. For each scenario, a probability mass function for the loss of income is specified. These are presented in the following table. Probability Loss (%) Scenario A Scenario B Scenario C 0.65 0.65 0.65 2 0.24 0.2 0.24 0.1 10 0.01 15 0.1 0.1 0.01 20 0.05 25


Extracted text: Assume that the probabilities that each of the three scenarios occurs are P(A) = 0.20, P(B) = 0.30, and P(C) = 0.50. Find the probability that scenario A occurs and that the loss is 5%. b. a. Find the probability that the loss is 5%. Find the probability that scenario A occurs given that the loss is 5%. C.