Eric Has a Job at an Electronics Store in a Mall

question 67

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. 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. Suppose Eric is paid $200 if electronics goods profits are $400 a day and $50 if electronics goods profits are $100 a day. What is Eric's expected pay for working hard?

• A) $250
• B) $100
• C) $225.75
• D) $162.50

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Definitions:

Detailed

Describes information or work that is done with thoroughness and precision.

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Knowledge, Skills

Pertains to the competencies and expertise that individuals possess, which enable them to perform tasks effectively.

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Detailed explanations of the roles, responsibilities, required qualifications, and reporting relationships of a specific job within an organization.