Use the Information for the Question(s) Below

question 22

Multiple Choice

Use the information for the question(s) below.
Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster" drug before
the Therapeutic Goods Administration (TGA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1
billion in net income for Big Cure. Little Cure has ten separate, less important drugs before the TGA waiting for approval. If
approved, each of Little Cure's drugs would produce $100 million in net income for Little Cure. The probability of the TGA
approving a drug is 50%
-What is the expected payoff for Big Cure's Blockbuster drug?

• A) $1 billion
• B) $500 million
• C) $100 million
• D) $0

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Definitions:

Morphine

A potent opiate analgesic drug derived from the opium poppy, used to relieve severe pain.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes, known for its sedative and euphoric effects.

Tolerance

The ability or willingness to tolerate the existence of opinions or behavior that one does not necessarily agree with.

Psychological Dependence

A condition characterized by an emotional or mental need for a particular substance or behavior, despite potential harmful consequences.