Refer to the information provided in Figure 17.1 below to answer the question(s) that follow.
Figure 17.1 Refer to Figure 17.1. John has two job offers when he graduates from college. John views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $50,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $60,000. John believes that he has a 50-50 chance of earning the bonus. What is John's expected utility for each job offer?
A. expected utility of 200 for the first offer and expected utility of 164 for the second offer
B. expected utility of 200 for the first offer and expected utility of 218 for the second offer
C. expected utility of 100 for the first offer and expected utility of 164 for the second offer
D. expected utility of 200 for the first offer and expected utility of 110 for the second offer
Answer: A
You might also like to view...
When talking about a coupon bond, face value and ________ mean the same thing
A) par value B) coupon value C) amortized value D) discount value
In response to news reports that taking aspirin daily can reduce an individual's risk of a heart attack, there will most likely be a(n)
A. increase in the demand for aspirin. B. increase in the quantity demanded of aspirin. C. increase in the supply of aspirin. D. decrease in the supply of aspirin.
Suppose that over time, consumers used discount stores at an increasing rate, the CPI would tend to be
a. accurate b. underestimated because consumers would buy goods and services at lower prices than those collected by the BLS c. underestimated because consumers would buy goods and services at higher prices than those collected by the BLS d. overestimated because consumers would buy goods and services at lower prices than those collected by the BLS e. overestimated because consumers would buy goods and services at higher prices than those collected by the BLS
The property rights of commissioners appointed to the Food and Drug Administration encourage them to
A) call for additional testing of a new drug even when a delay in approval is liable to cost more lives than additional testing is likely to save. B) make decisions in the interest of drug manufacturers. C) make decisions in the interest of physicians and patients. D) rush new drugs onto the market before they have been adequately tested. E) work shorter hours and take longer vacations than employees in the food and drug industries.