Use the Information Below to Answer the Following Question(s)

question 1

Multiple Choice

Use the information below to answer the following question(s)
Misty Inc. launches a new range of perfumes for men and women. The probability of high consumer demand for the product is 0.6 and low consumer demand is 0.4. The probability of a favorable survey response given high consumer demand is 0.9 and the probability of a favorable survey response given low consumer demand is 0.2.
-Greg is indifferent between receiving $2,000, and taking a chance at $2,500 with probability 0.7 and losing $1200 with probability 0.5. What is the expected value of this gamble?

• A) $ 1,150
• B) $ 1,800
• C) $ 1,460
• D) $ 2,045

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Definitions:

Conditioned Stimulus

A stimulus that initially has no effect but, when associated with an unconditioned stimulus, eventually triggers a conditioned response.

Fear of Snakes

An intense, irrational fear of snakes, also known as ophidiophobia.

Monkey

A primate belonging to the simian infraorder, characterized by its tail and, in many species, its ability to climb trees.

Phobias

Severe, unreasonable fear directed towards particular objects, activities, or situations resulting in evasion actions.