Using Scenario 2 suppose Jennifer has eliminated three of the answers but is unsure of which of the remaining two answers are correct. Determine whether it is rational for Jennifer to guess
What will be an ideal response?
What we need to do is to compute the expected value of guessing and compare it to the expected value of leaving the question unanswered. The expected value of guessing if she has eliminated three answers is 1/2 (9) + 1/2 (-5) = 9/2 – 5/2 = 4/2 = 2 . Since this is greater than the expected utility of skipping the question with a value of zero Jennifer should elect to answer the question.
You might also like to view...
If the currency drain ratio is zero, which of the following situations leads to the greatest total increase in the quantity of money?
A) an increase in the monetary base of $250,000 when the desired reserve ratio is 15 percent B) an increase in the monetary base of $100,000 when the desired reserve ratio is 5 percent C) an increase in the monetary base of $120,000 when the desired reserve ratio is 10 percent D) an increase in the monetary base of $100,000 when the desired reserve ratio is 50 percent E) an increase in the monetary base of $200,000 when the desired reserve ratio is 20 percent
Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $11,000 billion. What is the rate of growth of real GDP between 2015 and 2016?
A) 1% B) 2% C) 5% D) 10%
Comparative advantage is a comparison among producers based on opportunity cost.
Answer the following statement true (T) or false (F)
Approximately what percentage of total health care spending goes toward hospital care?
a. One-fifth b. One-third c. One-fourth d. One-tenth e. One-half