Examlex

Solved

A Person Is Trying to Decide If They Should Buy

question 109

Essay

A person is trying to decide if they should buy a lottery ticket. The ticket costs $1.00. If the ticket is a winner, the prize would be $10,000. Knowing that winning $10,000 is not a certain outcome (state of nature), the person finds that the probability of winning is 0.0009. Based on this information, the following payoff table can be constructed. A person is trying to decide if they should buy a lottery ticket. The ticket costs $1.00. If the ticket is a winner, the prize would be $10,000. Knowing that winning $10,000 is not a certain outcome (state of nature), the person finds that the probability of winning is 0.0009. Based on this information, the following payoff table can be constructed.   What is the decision using a maximax or optimistic approach? What is the decision using a maximax or optimistic approach?


Definitions:

Economic Benefits

The advantages or gains received by individuals or society from financial or non-financial activities.

Maintenance Activities

Tasks or actions undertaken to preserve or enhance the condition, functionality, or longevity of assets, equipment, or systems.

Task Activities

Specific actions or steps taken by individuals or teams in order to accomplish a task or achieve a goal.

Maintenance Activity

An action taken by a team member that supports the emotional life of the team.

Related Questions