You Are a Hotel Manager and You Are Considering Four

question 141

Multiple Choice

You are a hotel manager and you are considering four projects that yield different payoffs,depending upon whether there is an economic boom or a recession.The potential payoffs and corresponding payoffs are summarized in the following table. $$\begin{array} { | l | l | l | } \hline \text { Praject } & \begin{array} { l } \text { Bamn } \\( 50 \% ) \end{array} & \begin{array} { l } \text { Recession } \\( 50 \% ) \end{array} \\\hline \text { A } & \$ 20 & - \$ 10 \\\hline \text { B } & - \$ 10 & \$ 20 \\\hline \text { C } & \$ 30 & - \$ 30 \\\hline \text { D } & \$ 50 & \$ 50 \\\hline\end{array}$$ The expected value of project B is:

• A) $5.
• B) $10.
• C) $20.
• D) None of the answers are correct.

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Definitions:

Intensity

The degree of strength, force, or concentration of an activity, emotion, or property.

Spillover Effect

The phenomenon where an occurrence in one context or part of a system spreads to other parts, influencing them in some way.

Two-Factor Theory

A model that explains emotions as a result of physiological arousal and cognitive labeling of that arousal.

Low-Road Pathway

A neural pathway that processes sensory information related to threats and emotions more rapidly than the cognitive processing pathways, often bypassing conscious thought.