A Person Is Trying to Decide If They Should Buy

question 112

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 value of perfect information?

• A) $1.00
• B) $0.998
• C) $1.998
• D) Cannot be computed

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Definitions:

Influenced

The act of having an impact or effect on the behaviors, attitudes, opinions, or choices of another.

Zand's Model

A theoretical framework focusing on trust within organizations and how it influences decision-making and problem-solving.

Draconian Management

Refers to a very strict, rigid form of management with severe punishments for mistakes or failures, similar to the harsh laws of Draco of ancient Greece.

Playful Culture

An organizational culture that encourages fun and creativity, often to inspire innovation and improve employee satisfaction.