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:

Eliciting Change

The process of encouraging or facilitating modifications in thoughts, behaviors, or situations through various strategies or interventions.

Stage of Change

Stage of change refers to a phase within the Transtheoretical Model of Behavior Change, which describes the process individuals go through in changing behavior, ranging from not considering change to maintaining new behavior.

Preparation Stage

A stage in the Transtheoretical Model of behavior change where individuals intend to take action to address a behavior within the near future.

Self-Efficacy

An individual's belief in their own ability to succeed in specific situations or accomplish a task.