Xavier, Yolanda, and Zachary Are Considering Whether to Pool Their

question 40

Multiple Choice

Xavier, Yolanda, and Zachary are considering whether to pool their funds to buy into a lottery. There is a 20% chance that they will win big and make $8 million dollars, a 40% chance that they will win second prize and make $2 million, and a 40% chance that they will lose and win nothing. The entrance fee to participate in this lottery is $2 million. The partners decide whether or not to play by majority vote. Assume that Xavier has utility function u(x) = x². The other two partners have utility function u(x) = x, where x is the total amount of money won in the lottery. Will the partners buy in?

• A) All three will vote to buy in, so the partnership as a whole will buy in
• B) Only Xavier will vote to buy in, so the partnership as a whole will not buy in
• C) Yolanda and Zachary will vote to buy in, so the partnership as a whole will buy in

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Definitions:

Digitally Mediated Training

Training programs that are delivered through digital platforms, including online courses and virtual training sessions.

Piece-Rate

A payment method where employees are compensated based on the amount of work completed, rather than hours worked.

Salesperson's Quota

A target set for a salesperson, defining the amount of sales that they are expected to achieve within a specified period.

Order

A request made by a customer for the supply of goods or services, which typically leads to a legal obligation for fulfillment by the seller.