The Owner of Tastee Cookies Needs to Decide Whether to Lease

question 90

Multiple Choice

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: $\begin{array}{|l|l|l|l|}\hline\text {SIZE}\\\text {OF}&\text {DEMAND}\\\hline \text { OUTLET } & \text { LOW } && \text { HIGH } \\\hline \text { Small } & \$ 1,000 && 1,000 \\\hline \text { Medium } & 500 && 2,500 \\\hline \text { Large } & 0 && 3,000 \\\hline\end{array}$ If she feels there is a 30 percent chance that demand will be high, what is her expected payoff under certainty?

• A) $1,600
• B) $1,100
• C) $1,000
• D) $900
• E) $500

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Definitions:

Diastole

The period during a heartbeat when the heart muscle is in a state of relaxation, permitting the chambers to be replenished with blood.

Carotid Artery Pulse

A pulse that can be felt on either side of the neck over the carotid arteries, used to assess heart rate and rhythm.

Apical Pulse

The heartbeat as heard with a stethoscope placed on the chest directly over the apex of the heart, used for accurate measurement of heart rate.

Tachycardia

A condition in which the heart beats faster than normal while at rest, typically defined as having a heart rate of over 100 beats per minute.