Eric Has a Job at an Electronics Store in a Mall

question 44

Multiple Choice

Eric has a job at an electronics store in a mall. Eric doesn't like to work hard, and it costs him $100 to do so. Eric's employer cannot observe whether Eric works hard or not. If Eric works hard, there is a 75% probability that electronics goods profits will equal $400 a day and a 25% probability that electronics goods profits will equal $100 a day. If Eric shirks, there is a 75% probability that electronics goods profits will equal $100 a day and a 25% probability that electronics goods profits will equal $400 a day. Suppose Eric is paid $200 if electronics goods profits are $400 a day and $50 if electronics goods profits are $100 a day. Eric will _____ because the net gain of _____ from shirking is _____ than the net gain of _____ from working hard.

• A) shirk; $87.50; more; $62.50
• B) shirk; $125; more; $118
• C) work hard; $50; less; $62.50
• D) work hard; $100; less; $250

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Definitions:

Recorded Interview

An interview whose contents have been documented through audio or video recording.

Objective

An unbiased and impartial stance or goal that is not influenced by personal feelings or opinions.

Personal Biases

Individual preconceptions or prejudices toward specific groups, topics, or ideas that can affect judgment and decision-making.

Investigation Plan

A structured approach outlining the steps and methods to be used in conducting an investigation.