John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. To make the best decision, John should compare:
A. the expected value of his earnings if he doesn't expand with the expected value of his earnings if he does expand.
B. the difference in expected earnings if he does or does not expand to the cost of expansion.
C. the expected value of his earnings if he expands to the cost of expansion.
D. None of these statements is true.
B. the difference in expected earnings if he does or does not expand to the cost of expansion.
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According to the text, approximately what percentage of U.S. net public debt is held by foreign residents?
A) 50% B) 20% C) 90% D) 800%
Jamal (now age 54) lost his job. He has very specialized skills that are no longer in demand. Jamal's unemployment is best classified as:
a. cyclical. b. structural. c. seasonal. d. frictional. e. voluntary.
Suppose the price elasticity of supply for coffee is equal to one. 1,400 cups of coffee are supplied when its price is $4.0 per cup. If the price of coffee decreases to $3.60 per cup, its supply will: a. decrease to 1,260 cups
b. increase to 1,540 cups. c. decrease to 1,300 cups. d. remain the same at 1,400 cups.
Policies designed to pay off the national debt will result in:
A. A smaller level of aggregate demand B. Inflation. C. A higher level of aggregate demand. D. A redistribution of income but not wealth.