When you apply for a graduate position you could be asked to sit for a Personality test. These tests attempt to determine whether an applicant for a job possesses certain innate traits that managers think will help them to do the job well. The key personality traits that managers would like a job applicant to have are
Conscientiousness
Emotional Stability
Agreeableness
Extroversion
Openness to Experience
Some of the questions on these tests are designed to determine whether an applicant has undesirable traits such as emotional instability (we call Event A). When a test answer indicates that a person is likely to be emotionally unstable this is said to be a Positive test and we call it event B.
These tests have been widely criticised because many applicants learn how to cheat and give answers that will impress managers but which the applicant knows are not true. Even if applicants do not cheat however there is another problem that arises with these tests and with most medical tests namely that many people who do not have the undesirable trait will give similar answers to the answers given by people who are emotionally unstable.
Suppose you are told that 5% of people are emotionally unstable and when people sit for the test
The Probability of a Positive result when a person is emotionally unstable is 80%
The Probability of a Positive result when a person is emotionally stable is 25%