Instruction 17-6
a Student Wanted to Find Out the Optimal

question 39

True/False

Instruction 17-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the mean amount of time he needed to put in every week studying for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.
$$\begin{array} { | l | l | l | l | } \hline & 16 \text { hours } & 8 \text { hours } & 4 \text { hours } \\\hline \text { Easy Exam } & 40 & 60 & 80 \\\hline \text { Difficult Exam } & 100 & 50 & 0 \\\hline\end{array}$$
-Referring to Instruction 17-6,the optimal strategy using the expected monetary value criterion is to study 8 hours per week on average for the exam.

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Definitions:

Trade Restrictions

Measures imposed by governments to control or limit the exchange of goods and services across their borders, including tariffs, quotas, and embargoes.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, leading to more efficient trade.

Exports Cars

The activity of selling and shipping cars from one country to another, contributing to a country's trade balance.

Imports Cheese

The act of bringing cheese into one's country from another to sell.