Melanie Must Choose Between Two Jobs

question 13

Multiple Choice

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk neutral (U(W) = W) , which job will she choose?

• A)she is indifferent between the two jobs
• B)job A
• C)job B
• D)her preferences violate the axioms of expected- utility theory.

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Definitions:

Systems Development

The process of creating and maintaining information systems, including hardware, software, network, and data components, tailored to meet organizational needs.

Budgeting

The process of creating a plan to spend your money, allocating specific amounts to various needs, savings, and desires.

Reporting

The method of arranging data into summary reports to track the performance of various sectors within a business.

Self-Discipline

The ability to control one's feelings and overcome one's weaknesses; the ability to pursue what one thinks is right despite temptations to abandon it.