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Dan Hein Owns the Mineral and Drilling Rights to a 1,000

question 9

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Dan Hein owns the mineral and drilling rights to a 1,000 hectare tract of land.If he drills a well and does not strike oil his net loss will be $500,000, but if he drills a well and strikes oil his net gain will be $1,000,000.If he does not drill, his loss is the cost of the mineral and drilling rights, which amount to $10,000.The probability of the state of nature "oil in the tract" is unknown.If Dan is an optimist, he would choose the ___.


Definitions:

Big Five

A personality model that outlines five major traits used to describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Extraversion

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.

Imaginative

Possessing the ability or tendency to think creatively and inventively, often leading to new ideas or concepts.

Sexual Orientation

An inherent or immutable enduring emotional, romantic or sexual attraction to other people.

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