Question

1) What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature called

A) isoquant table B) payback period matrix C) payoff table D) feasible region E) decision tree

 

2) Doing nothing would yield how much profit if favorable market conditions prevail according to the following profit decision table? Alternative Do Nothing Favorable marketUnfavorable Market S20,000 $10,000

A) S5,000 B) $20,000 C)-$10,000 D) SO E) $10,000

 

3) The expected monetary value of a decision alternative is the sum of all possible payoffis from the alternative, each weighted by the probebility of that payoff occurring.

A) True B) False

 

4) What decision criterion would be used by an optimistic decision maker solving a problem under conditions of uncertainty?

A) expected monetary value B) equally likely C) maximax D) maximin E) minimin

 

5) Expected monetary value is most appropriate for problem solving that takes place:

A) when conditions are average B) when all states of nature are equally likely C) when all alternatives are equally likely D) under conditions of uncertainty E) under conditions of risk.

Answer 1

1. c) payoff table

2. b) $2000

3. b) false

4. c) maximax

5. e) under condition of risk