Suppose a Game Has Four Outcomes: A, B, C, and D

question 90

Short Answer

Suppose a game has four outcomes: A, B, C, and D. The probability of outcome A is 0.4, the probabilities of each of the other outcomes is 0.2. A player receives $2 if outcome A occurs, $3 if outcome B occurs, $1 if outcome C occurs, and must pay $5 if outcome D occurs. What is the mean value of one trial of this game?

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to specialized trade benefits.

Special Natural Endowment

Unique natural resources or advantages that a country or region possesses, which can provide a competitive edge in certain industries or sectors.

Japanese Dominance

A period or concept where Japan excels or has excelled significantly in certain industries or economic sectors, outperforming competitors.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, using fewer resources.