The Expected Value with Perfect Information

question 88

Multiple Choice

The expected value with perfect information

• A) equals EVPI - EMV
• B) requires that each decision alternative have a known probability of occurrence
• C) is an input into the calculation of the expected value of perfect information
• D) is the average of the maximax and the maximin
• E) none of the above

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Definitions:

Income Elasticity

A measure of how much the demand for a good or service changes with a change in consumers' income.

Most Elastic

Refers to the responsiveness of demand or supply to changes in price, with the most elastic being the most sensitive to price changes.

Perfectly Elastic

A situation in a market where the quantity demanded or supplied responds infinitely or disproportionately to changes in price.

Cross Elasticity

A measure of how the quantity demanded of one good or service changes in response to a change in the price of another good or service.