Use a Contingency Table

question 13

Multiple Choice

Use a contingency table.
-The option to buy extended warranties is commonplace with most electronics
Purchases. But does the type of purchase affect a consumer's willingness to pay extra for
An extended warranty? Data for 420 consumers who purchased digital cameras and
Laptop computers from a leading electronics retailer are summarized in the table. The
Probability that a consumer does not purchase an extended warranty is

• A) .07
• B) .42
• C) .58
• D) .17
• E) .83

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Definitions:

Possible Gains

Refers to the potential benefits or positive outcomes that might be achieved in a certain situation.

Tradeoffs

The balancing act of giving up one thing to gain another, often used in discussions about decision-making processes.

Decisions

Choices made from among alternatives based on judgement or information.

Rent

A payment made by a tenant at regular intervals in exchange for the use of land, a building, an apartment, an office, or other property.