The Dean of a College Wants to Determine Which of Two

question 173

Multiple Choice

The dean of a college wants to determine which of two new classes to offer for the upcoming semester. Due to facility constraints only one class can be offered at this time. The dean feels that the first class has an 80 percent chance of earning the college about $75,000, but a 20 percent chance of losing $35,000. If the class is successful, then its next level class will be offered, with a 75 percent chance of earning $60,000, but a 25 percent chance of losing $30,000. Weighing the options, the dean feels that the second class has a 60 percent chance of earning $85,000, but a 40 percent chance of losing $40,000. If the second class is successful, then its next level class will be offered with a 50 percent chance of earning $80,000, but a 50 percent chance of losing $45,000. If both classes are not successful, neither of their next level classes will be offered to the students.What is the expected value for selecting the second class?

• A)$90,000
• B)$83,000
• C)$75,500
• D)$50,000
• E)$45,500

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Definitions:

Primary Drives

Basic, innate urges such as hunger, thirst, and the desire for warmth, crucial for survival.

Affiliation Motive

An inherent desire to belong to a group or form close personal relationships and social connections.

Innate Drive

An internal motivated force that drives individuals to fulfill basic physiological and psychological needs.

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues and the promotion of secondary sexual characteristics.