Using Scenario 2 suppose Susan has eliminated two of the answers but is unsure of which of the remaining three answers are correct. Determine whether it is rational for Bill 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 two answers is 1/3 (9) + 2/3(-5) = 9/3 – 10/3 = -1/3 . Since this is less than the expected utility of skipping the question with a value of zero Susan should elect not to answer the question.
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The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to
A) 4.00. B) 2.00. C) 0.50. D) 0.25.
You pay $15 for an all-you-can-eat buffet. The food isn't so good, but definitely edible. When you finish eating, what is the marginal value of the last bite of food you consumed?
A) zero B) $15 C) positive D) negative