A Decision-Maker Using the Maximin Criterion on the Problem Below

question 78

Multiple Choice

A decision-maker using the maximin criterion on the problem below would choose Alternative __________ because the maximum of the row minimums is __________. $$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \\\begin{array} { | l | c | c | c | } \hline & \underline { 1 } & \underline { 2 } & \underline { 3 } \\\hline \text { Alternative A } & 50 & 55 & 60 \\\hline \text { Alternative B } & 30 & 50 & 80 \\\hline \text { Alternative C } & 70 & 80 & 70 \\\hline \text { Alternative D } & - 100 & - 10 & 140 \\\hline\end{array}$$

• A) A; 55
• B) B; 30
• C) C; 70
• D) D; 140
• E) D; 10

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Definitions:

Favored Customers

Customers who receive special benefits, discounts, or terms due to their status or relationship with a seller or service provider.

Rationing Mechanism

A system used to allocate scarce goods, services, or resources among people with competing needs or desires.

Tariff

A tax imposed by a government on goods and services imported from other countries, designed to raise revenue or protect domestic industries.

Imported Oil

Oil that is brought into a country from foreign sources for use in energy production, manufacturing, and other applications. It contrasts with domestically produced oil.