Mark Has Two Alternatives

question 149

Multiple Choice

Mark has two alternatives.There is a 50 percent chance that he will earn $120,000 if he accepts a government contract.If he decides not to accept the contract and instead continues on his present project, he has an 80 percent chance of earning $100,000.If Mark is a perfectly rational decision maker, which of the following statements is TRUE?

• A)He will accept the government contract.
• B)His expected value of continuing on the present project is $80,000.
• C)He will attempt to satisfice.
• D)He will ignore economic criteria in making his decision.
• E)He will revise his earnings estimate on the government contract to make it more attractive.

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Definitions:

Wage Differential

The variation in wages received by individuals due to differences in job characteristics, location, industry, or within the same organization.

Discrimination

Unfair or prejudicial treatment of individuals or groups based on characteristics such as race, gender, age, or sexual orientation.

Competitive Labor Market

A market where numerous buyers and sellers interact to determine the price and quantity of labor, ensuring no single entity can dictate the market terms.

Wage Discrimination

The practice of paying different wages to workers who perform similar tasks, based on non-performance-related factors such as race, gender, religion, or nationality.