A Person Is Trying to Decide If They Should Buy

question 93

Multiple Choice

A person is trying to decide if they should buy a lottery ticket. The ticket costs $2.00. If the ticket is a winner, the prize would be $1,000. Knowing that winning $1,000 is not a certain outcome (state of nature) , the person finds that the probability of winning is 0.001. Based on this information, the following payoff table can be constructed: What is the value of perfect information?

• A) $1.00
• B) $0.998
• C) $1.998
• D) Cannot be computed

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Definitions:

Puberty

The developmental stage in humans marking the onset of adolescence, characterized by physical and hormonal changes that lead to sexual maturity.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Unconscious Influences

Effects on behavior, thoughts, or emotions that occur without conscious awareness, originating from the unconscious mind.

Freud's Theory

A set of psychoanalytic theories developed by Sigmund Freud that emphasizes unconscious motivations and conflicts as drivers of human behavior, including ideas like the id, ego, and superego.