Heading: Analyzing Risky Decisions

question 43

Multiple Choice

Heading: Analyzing Risky Decisions
**Reference: Use the decision tree along with the given probabilities to answer the next six questions
Probability Event A = 30% Probability Event B = 70%
Probability Event 1 = 58% Probability Event 2 = 42%
Probability of Event A given that Event 1 occurs = 16%
Probability of Event B given that Event 1 occurs = 84%
Probability of Event A given that Event 2 occurs = 50%
Probability of Event B given that Event 2 occurs = 50%

-*If the decision maker chooses Decision A and Event 2 occurs, which decision alternative should the decision maker choose at node E?

• A)Decision 1
• B)Decision 2
• C)Either Decision; they both have the same expected value.
• D)Neither Decision; more information is needed.

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Definitions:

Abraham Maslow

An American psychologist known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.

Theory

A set of principles on which the practice of an activity is based, or an idea used to account for a situation or justify a course of action.

Agreeableness

Agreeableness is a personality trait characterized by being kind, sympathetic, cooperative, warm, and considerate towards others.

Fundamental Need

Refers to a basic human requirement that is essential for individuals to live a healthy and well-balanced life, such as food, water, shelter, and love.