Cruise with Us is running a promotion to attract new customers and is offering a free around the world cruise to any customer who can sink a hole in one on a professional golf course located near Cruise with Us' corporate headquarters. The cost of the around the world cruise is $50,000 and Cruise with Us is running the promotion for a month. The probability that a customer can sink a hole in one
during the one month period is 5 percent. What is the expected cost of the promotion?
A) $2,500 B) $50 C) $500 D) $250
A) $2,500
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A consumer has $50 to spend. He has to decide between buying two goods: magazines priced at $5 each and DVDs priced at $10 each. Which of the following combinations of the two goods will exactly satisfy his budget constraint?
A) 3 magazines and 4 DVDs B) 2 magazines and 4 DVDs C) 6 magazines and 1 DVD D) 2 magazines and 2 DVDs
The loss of the profit motive by a publicly owned natural monopoly could:
A. increase the motivation to improve efficiency. B. reduce the motivation to improve efficiency. C. increase the incentive to provide better service. D. increase the incentive to lower costs.
The demand for a factor of production depends on the:
a. supply of the factor. b. supply of other factors of production. c. demand for other factors of production. d. demand for the products that it helps to produce.
Explain why the scarcity of resources causes people and nations to consider opportunity costs and trade-offs among choices. Give a personal example of an opportunity cost that you have faced and the impact of the decision you made.