Two Professors at a Nearby University Want to Co-Author a New

question 49

Multiple Choice

Two professors at a nearby university want to co-author a new textbook in either economics or statistics.They feel that if they write an economics book they have a 50% chance of placing it with a major publisher where it should ultimately sell about 40,000 copies.If they can't get a major publisher to take it,then they feel they have an 80% chance of placing it with a smaller publisher,with sales of 30,000 copies.On the other hand if they write a statistics book,they feel they have a 40% chance of placing it with a major publisher,and it should result in ultimate sales of about 50,000 copies.If they can't get a major publisher to take it,they feel they have a 50% chance of placing it with a smaller publisher,with ultimate sales of 35,000 copies.
-What is the expected payoff for the optimum decision alternative?

• A)50,000 copies
• B)40,000 copies
• C)32,000 copies
• D)30,500 copies
• E)10,500 copies

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Definitions:

Berkeley

An Irish philosopher of the early modern period known for his theory of immaterialism, which denied the existence of material substance in favor of the perception of such.

Democritus

An ancient Greek philosopher and a central figure in the development of the atomic theory of the universe.

Atoms

The smallest units of matter, consisting of a nucleus surrounded by electrons, which form the basic building blocks of all chemical elements.

Created

Brought into existence; something made or produced by human or artistic effort.