Which of the Following Choices Is Not True About Decision

question 28

Multiple Choice

Which of the following choices is not true about decision theory?

• A)Decision alternatives for one person can be states of nature for another.
• B)Payoffs are always positive or zero.
• C)If you play a card game at a casino, the cards you are dealt are states of nature.
• D)If you decide to take a MOOC (massive open online course), how much you learn is a payoff.
• E)In a two-person interaction, it is possible that the sum of the two payoffs is positive.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, indicating the economic benefit to consumers.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, resulting in market balance.

Surplus Amount

The quantity of a good or service that exceeds what is demanded at a given price.

Producer Surplus

The difference between what producers are willing to receive for a good compared to what they actually receive, essentially the profit.