A Person Is Trying to Decide If They Should Buy

question 78

Multiple Choice

A person is trying to decide if they 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 probability of losing $2.00?

• A) 0.001
• B) 0.999
• C) 1.00
• D) Cannot be computed

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Definitions:

Unused Capacity

The available but unutilized production or service capacity of a business, often reflecting inefficiencies or missed revenue opportunities.

Time-Driven

Pertaining to methods or systems where actions are scheduled or measured based on time.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate information on the real cost of specific product lines, services, or customers.

Number Of Employees

The total count of individuals employed by a company or organization, regardless of their employment status (full-time, part-time, etc.).