TABLE 19-6 a Student Wanted to Find Out the Optimal Strategy to Strategy

question 270

True/False

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.

-Referring to Table 19-6, the optimal strategy using the maximax criterion is to study 8 hours per week on average for the exam.

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Definitions:

Causes

Factors or events that bring about an effect or a change.

Fallacy Of Composition

The incorrect belief that what is true for an individual member of a group is necessarily true for the group as a whole.

Economic Variable

An attribute that can take different values and influences economic behavior or outcomes, such as income, price, or interest rate.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.