Reference no: EM133360166

The US. Department of Education is considering whether to require all public schools to screen 5-year old students for dyslexia, a learning disorder that can severely impair an individual's ability to read. Experts estimate that the incidence of dyslexia in the US. is about 11%, and the screening test generates true positives at a rate of 92% (sensitivity) and false positives at a rate of 20% (1 - speci?city). Screening one student costs $950, and tutoring one child with dyslexia costs about $15,000. Furthermore, research suggests that each adult with untreated dyslexia (hence who cannot read effectively) experiences a decrease of $200,000 in lifetime earnings. 3. What is the cost per student of a screening program in which all students are screened and those who test positive are tutored (tutoring is assumed to be completely effective for dyslexic students and harmless for non-dyslexic students)? b. How high would the incidence of dyslexia have to be before the "screening and then tutoring" strategy was dominated by a program of tutoring all students, with no testing? c. Suppose an innovative firm develops a new screening test for dyslexia that would lower the frequency of false positives from 20% t0 5%. How much should society be willing to pay to use that new test?