?A Decision Maker Has Chosen

question 6

Multiple Choice

?A decision maker has chosen .4 as the probability for which he cannot choose between a certain loss of 10,000 and the lottery p(-25000) + (1 - p) (5000) . If the utility of -25,000 is 0 and of 5000 is 1, then the utility of -10,000 is

• A) ?.5
• B) ?.6
• C) ?.4
• D) ?4

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Definitions:

Apostrophes

Punctuation marks used to indicate either possession (e.g., Harry’s book) or the omission of letters or numbers (e.g., can’t for cannot).

Bicycle

A bicycle is a human-powered, pedal-driven vehicle with two wheels attached to a frame, one behind the other.

Fair Die

A die that has an equal probability of landing on any of its faces when thrown.

Probability

A mathematical measure of the likelihood of an event occurring, often expressed as a number between 0 and 1.