Mark Has Two Job Offers When He Graduates from College

question 20

Multiple Choice

Mark has two job offers when he graduates from college. Mark views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $40,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $40,000. Mark believes that he has a 50-50 chance of earning the bonus. If Mark takes the offer that maximizes his expected utility and is risk-loving, which job offer will he choose?

• A) Mark will take the first offer.
• B) Mark will take the second offer.
• C) Mark is indifferent between the offers-both yield the same expected utility.
• D) Indeterminate from the given information.

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Definitions:

Attribution

The process by which individuals explain the causes of behavior and events, attributing them to internal or external factors.

Capital Punishment

The legally authorized killing of someone as punishment for a crime, typically crimes of a severe nature such as murder.

Cognitive Dissonance

The discomfort experienced when holding two or more conflicting cognitions, leading to an alteration in beliefs, attitudes, or behaviors to reduce the discomfort.

An Attribution

The process of explaining one's own behavior or the behavior of others.