The Local Operations Manager for the Internal Revenue Service Must

question 36

Multiple Choice

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: $$\begin{array} { | l | l | l | l | } \hline { \begin{array} { l } \text { NUMBER } \\\text { OF } \\\text { EXAMINERS }\end{array} } & { \text { COMPLIANCE } } \\\hline & \text { LOW } & \text { NORMAL } & \text { HIGH } \\\hline \text { One } & 50 & 50 & 50 \\\hline \text { Two } & 100 & 60 & 20 \\\hline \text { Three } & 150 & 70 & - 10 \\\hline\end{array}$$ If she uses the Laplace criterion, how many new examiners will she decide to hire?

• A) one
• B) two
• C) three
• D) either one or two
• E) either two or three

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Definitions:

Nobel Prize

A set of annual international awards bestowed in several categories by Swedish and Norwegian institutions in recognition of academic, cultural, or scientific advances.

Herbert Simon

An American economist and cognitive psychologist known for his research in the fields of decision-making and artificial intelligence; he is credited with the concept of bounded rationality.

Perfectly Rational

The theoretical concept of making decisions based on complete information and logical, objective analysis.

Government Contract

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