Exhibit 20-3 Below You Are Given a Payoff Table Involving Two States

question 17

Multiple Choice

Exhibit 20-3
Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of the occurrence of state of nature S₁ is 0.4.
-Refer to Exhibit 20-3. The expected value of the best alternative equals

• A)13,000
• B)14,000
• C)15,000
• D)16,000

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Definitions:

Chester I. Barnard

An American business executive and author known for his contributions to management theory, especially in the area of organizational and leadership studies.

College Professor

An educator and scholar at a college or university who teaches and engages in research.

Economic Man

A theoretical concept in economics that depicts an individual as a rational and self-interested agent, making decisions to maximize their utility.

Frederick W. Taylor

An American engineer and management consultant who is known as the father of scientific management, focusing on efficiency and labor productivity.