Dante Has Two Possible Routes to Travel on a Business

question 97

Multiple Choice

Dante has two possible routes to travel on a business trip. One is more direct but more exhausting, taking one day but with a probability of business success of 1/4. The second takes three days, but has a probability of success of 2/3. If the value of Dante's time is $1000/day, the value of the business success is $12,000, and Dante is risk neutral,

• A) it doesn't matter which path he takes, because he doesn't consider risk.
• B) he should take the 1-day trip, because he doesn't consider risk.
• C) he should take the 1-day trip, because $11,000 is greater than $9,000.
• D) he should take the 3-day trip, because it will increase his expected net revenue by $3,000.
• E) he should take the 3-day trip, because it will increase his expected net revenue by $5,000.

Understand the relationship between the elasticity of demand for labor and the elasticity of demand for the product it produces.

Recognize how a firm's degree of monopoly power affects its resource demand elasticity.

Comprehend the relationship between resource demand elasticity and marginal revenue product curves.

Understand how wage rates affect total payrolls and employment in the context of elastic and inelastic labor demand.

---

Definitions:

Laugh

An audible expression of amusement or joy, often a spontaneous physiological response to humor or happiness.

Stop Crying

A term often used to describe the attempt or action taken to halt the shedding of tears or emotional distress.

Food Preference

An individual's specific liking for some types of foods over others, often influenced by culture, experience, and genetics.

Beef Liver

The liver of a cow used as food, known for being nutrient-dense, rich in protein, vitamins, and minerals.