A Medical Doctor Is Involved in a $1 Million Malpractice

question 40

Multiple Choice

A medical doctor is involved in a $1 million malpractice suit.He can either settle out of court for $250,000 or go to court.If he goes to court and loses,he must pay $825,000 plus $175,000 in court costs.If he wins in court the plaintiffs pay the court costs.Identify the states of nature of this decision-making problem.

• A)Two choices: (1)go to court and (2)settle out of court.
• B)Two possibilities: (1)win the case in court and (2)lose the case in court.
• C)Four consequences resulting from Go/Settle and Win/Lose combinations.
• D)The amount of money paid by the doctor.

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Definitions:

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