A Decision Maker's Worst Option Has an Expected Value of $1,000

question 124

Multiple Choice

A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. What is the expected value of perfect information?

• A)$5,000
• B)$4,000
• C)$3,000
• D)$2,000
• E)$1,000

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Definitions:

Resting Potential

The voltage difference across the neuron's plasma membrane when it is not transmitting a signal, providing the neuron with the potential energy needed for activation.

Voltage Gradient

Difference in charge between two regions that allows a flow of current if the two regions are connected.

Concentration Gradient

Difference in the relative abundance of a substance among regions of a container; allows the substance to diffuse from an area of higher concentration to an area of lower concentration.

Diffusion

The movement of molecules from an area of higher concentration to an area of lower concentration, a fundamental process in biology and chemistry.