In Decision-Making Under Uncertainty, the Approach That Considers Only the Best

question 90

Multiple Choice

In decision-making under uncertainty, the approach that considers only the best and the worst payoffs for each decision alternative is the __________.

• A)maximin criterion
• B)maximax criterion
• C)Hurwicz criterion
• D)minimax regret strategy
• E)maximin regret strategy

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Definitions:

Marginal Utility

The change in total utility a person receives from consuming one additional unit of a good or service.

Total Utility

The total satisfaction received from consuming a particular quantity of a good or service.

Average Utility

The total utility received from a certain amount of goods or services divided by the number of goods or services consumed.

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.