Scenario 5.5: Engineers at Jalopy Automotive Have Discovered a Safety Flaw in Flaw

question 50

Multiple Choice

Scenario 5.5:
Engineers at Jalopy Automotive have discovered a safety flaw in their new model car. It would cost $500 per car to fix the flaw, and 10,000 cars have been sold. The company works out the following possible scenarios for what might happen if the car is not fixed, and assigns probabilities to those events:
Scenario Probability Cost
A. No one discovers flaw .15 $0
B. Government fines firm .40 $10 million
(no lawsuits)
C. Resulting lawsuits are lost .30 $12 million
(no government fine)
D. Resulting lawsuits are won .15 $2 million
(no government fine)
-Refer to Scenario 5.5. Which of the following statements is true?

• A) The expected cost of not fixing the car is less than the cost of fixing it.
• B) The expected cost of not fixing the car is greater than the cost of fixing it.
• C) It is not possible to tell whether the expected cost of fixing the car is less than the cost of fixing it, because the probabilities are subjective.
• D) It is not possible to tell whether the expected cost of fixing the car is less than the cost of fixing it, because the probabilities are not equal.

Recognize the role of parenting styles in shaping a child's emotional and social development.

Understand how a child's behavior can influence parental treatment and vice versa.

Explore the association between divorce and child development outcomes across different ages.

Identify and explain the concepts of stereotypes, stereotype threats, and their implications for social inequality.

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Definitions:

Global Trade

The exchange of goods, services, and capital across international borders or territories.

Documents of Title

Legal documents that provide proof of ownership of property, including titles for vehicles or deeds for real estate.

Warehouse Receipts

Documents issued by warehouse operators certifying the possession and storage of specified goods.

Bills of Lading

Official documents issued by a carrier to acknowledge the receipt of cargo for shipment.