One Local Hospital Has Just Enough Space and Funds Currently

question 113

Multiple Choice

One local hospital has just enough space and funds currently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the American Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association the first year and a 50 percent change of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000 and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000 and a 40 percent chance for getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the decision alternative to select the cancer lab?

• A) $100,000
• B) $60,000
• C) $50,000
• D) $40,000
• E) $20,000

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Definitions:

At Least Two Wives

Pertains to the practice of polygamy, specifically polygyny, where a man is married to two or more wives simultaneously.

Polygamy

Expands the nuclear family "horizontally" by adding one or more spouses (usually women) to the household.

Family Form

The structural composition of a family unit, which can vary greatly across cultures and over time, including nuclear families, extended families, single-parent families, etc.

Talcott Parsons

An American sociologist known for his work in the theory of social action, the structure of social systems, and the role of values in social stability.