Fairco, a Family Business, Is Considering Making an Investment in Its

question 3

Multiple Choice

Fairco, a family business, is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation. The best decision for Fairco using the Hurwicz criterion with a coefficient of optimism equal to 0.80 would be to

• A) make the large investment.
• B) make the medium investment.
• C) make the small investment.
• D) choose stable demand.

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Definitions:

Nomothetic Goals

In personality psychology, this refers to the approach that aims to study personality through generalized, universal laws applicable to large groups of people.

Essential Motivations

The basic, inherent drives that influence humans to act or behave in certain ways, including survival, belonging, and self-esteem needs.

Idiographic

An approach focusing on the unique aspects of an individual or case rather than seeking to generalize findings to a broader population.

Personality Process

The ongoing, dynamic interactions and mechanisms within an individual that contribute to the formation of personality traits and behaviors.