A Person Is Trying to Decide If They Should Buy

question 9

Short Answer

A person is trying to decide if they should buy a lottery ticket.The ticket costs $1.00.If the ticket is a winner, the prize would be $10,000.Knowing that winning $10,000 is not a certain outcome (state of nature), the person finds that the probability of winning is 0.0009.Based on this information, the following payoff table can be constructed: What is the decision using a maximax or optimistic approach?

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Definitions:

Admission Points

Criteria or scores used by educational institutions to determine an applicant's eligibility for entrance.

Minority Status

The position of being part of a group that is smaller in number within a society and often has less power, representation, or privilege.

Cultural Capital

The non-financial social assets that promote social mobility beyond economic means, including education, intellect, style of speech, dress, or physical appearance.

Formal Knowledge

Systematically organized information, often verified and recognized by institutions, that is taught through educational systems or specialized training.