TABLE 17-5 $$\text { The following payoff table showsprofits associated witha set of } 2 \text { alternatives under } 3 \text { possible events. }$$

question 61

Short Answer

TABLE 17-5
$$\text { The following payoff table showsprofits associated witha set of } 2 \text { alternatives under } 3 \text { possible events. }$$ $\quad$ $\quad$ $\quad$ $\quad$ $\text {Action }$
$\begin{array} { c c c } \text { Event } & A & B \\1 & 1000 & 1200 \\2 &500 & 700\\3&300&-200\end{array}$
Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3.
-Referring to Table 17-5, what is the opportunity loss for Action A with Event 1?

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Definitions:

Tax

A financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Consumer Surplus

The shortfall between the total consumers are willing to contribute towards a good or service and the actual contribution.

Tax

A mandatory financial charge or a type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing a measure of producer welfare.