A Person Is Trying to Decide If He or She

question 21

Multiple Choice

A person is trying to decide if he or she 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 decision that uses a maximax or optimistic approach?

• A)Buy
• B)Don't buy
• C)Lose
• D)Win

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Definitions:

Ethics Check

A process or checklist used to ensure decisions or actions comply with ethical standards or principles.

Ethical Shortcomings

Refers to lapses or deficiencies in ethical behavior and decision-making by individuals or organizations.

Decision-making Process

A systematic sequence of steps that starts with identifying a problem or opportunity and ends with a final choice among alternatives.

Evaluated

The process of assessing or examining something to determine its value, quality, importance, extent, or condition.