Use the Following to Answer Questions

question 139

Multiple Choice

Use the following to answer questions:
-(Table: Choice with Uncertainty) Look at the table Choice with Uncertainty. Suppose the probability that the sitcom does not make it to television is 50%, that it makes it to television but is not the most viewed show in its time slot is 30%, and that it makes it to television and is the most viewed show in its time slot is 20%. Given this information, Norman, as a utility maximizer:

• A) should keep his teaching job.
• B) should quit his teaching job and go to Hollywood.
• C) will be indifferent between leaving and staying, because his expected income is the same whether he stays a teacher or moves to Hollywood.
• D) will be indifferent between leaving and staying, because his expected total utility is the same whether he stays a teacher or moves to Hollywood.

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Definitions:

Consumption

The act of using goods and services to satisfy personal or collective needs and desires, playing a central role in economic theories and the functioning of economies.

Basic Necessities

Fundamental requirements for human survival and wellbeing, including food, water, shelter, and clothing.

Government Transfer

Financial or other resources moved from government bodies to individuals, businesses, or other governments, typically in the form of support or subsidies.

Definitions

Explicit explanations or meanings assigned to words or phrases to clarify their use in context.