TABLE 17-1
the Following Payoff Table Shows Profits Associated $\begin{array}{llcc} \text {States } &\text { A1 }&\text { A2 }&\text {A3 }\\\hline1&12&-2&8\\2&4&10&5\end{array}$

question 23

Multiple Choice

TABLE 17-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.
$\begin{array}{llcc} \text {States } &\text { A1 }&\text { A2 }&\text {A3 }\\\hline1&12&-2&8\\2&4&10&5\end{array}$


$\text {where:}$$\quad$$\quad$ $\text {S1 is state of nature 1 }$$\quad$$\text {A1 is action alternative 1}$
$\quad$$\quad$$\quad$$\quad$$\quad$$\text {S2 is state of nature 2}$$\quad$$\text { A2is action alternative 2}$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {A3 is action alternative3 }$

-Referring to Table 17-1, what is the best action using the maximax criterion?

• A) Action A1
• B) Action A3
• C) Action A2
• D) It cannot be determined.

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Definitions:

Great Depression

A severe worldwide economic downturn that lasted from the late 1920s through the 1930s, leading to mass unemployment and economic hardship.

Deprivation

The state of being deprived of basic needs or comforts, often leading to adverse physical and psychological effects.

West Coast

The westernmost region of the United States, known for its diverse landscapes, significant technological and entertainment industries, and vibrant cultural scenes.

San Francisco

A cultural, commercial, and financial center in Northern California known for its iconic Golden Gate Bridge, steep streets, and historical significance in the technology industry.