Use the Information for the Question(s)below

question 17

Multiple Choice

Use the information for the question(s) below.
Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential 'blockbuster' drug before the Therapeutic Goods Administration (TGA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has 10 separate, less important drugs before the TGA waiting for approval. If approved, each of Little Cure's drugs would produce $100 million in net income for Little Cure. The probability of the TGA approving a drug is 50%.
-What is the expected payoff for Big Cure's blockbuster drug?

• A)$500 million
• B)$100 million
• C)$0
• D)$1 billion

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Definitions:

Tone Deaf

A term often used to describe a person who struggles to distinguish between different pitches or reproduce musical notes accurately.

Physical Properties

Characteristics of a material or object that can be observed or measured without changing its composition, such as density, color, or melting point.

Sound Waves

Oscillations of air pressure that travel through the air or another medium and can be heard when they reach a person's or animal's ear.

Auditory Perception

The process by which the brain interprets and makes sense of sound signals received from the ears.