01 Note "Risk, Uncertainty and Decision-Cases and Lecture Notes" Assignment1 (Homework1)

Question: Analyze "Case1, Income and Risk" - page 01 and "Case3, Promotion and MBA: Is MBA Paid Off?" - page 03 of 01 Note.

Case 1 Income and Risk:

Two types of temporary job contract for one year are offered to you. Type A job depends on the achievement of your performance where one can earn 200,000 Yen monthly wage when you achieve a pre-specified goal, or you can earn 100,000 Yen when you fail to achieve a goal. The achievement of goal depends on good luck or bad luck with 50-50

percent possibility of each month. The other type job contract offers you with a fixed wage of 151,000 Yen, but has a slim chance of 1 percent of removal into reserve with only 51,000 Yen compensation.

Question 1: Which of the two job contracts do you choose and why? Do you maximize the average wage or minimize risk associated with job contracts? Calculate your expected income and the degree of uncertainty of your wage. Discuss your decision making.

Hint: Ch.5 of Pindyck and Rubinfeld, Microeconomcs 8-th ed., 2013

Link:

https://edisciplinas.usp.br/pluginfile.php/4292722/mod_resource/content/1/%288th%20Edition%29%20%28The%20Pearson%20Series%20in%20Economics%29%20Robert%20Pindyck%2C%20Daniel%20Rubinfeld-Microecon.pdf

http://kimoon.co.kr/mi/pindyck-8/im/Ch05.pdf

Case 3. Promotion and MBA Is MBA Paid Off?

Against the popularity of MBA education in the world, there have been debate whether MBA education would advance promotion of the students. Examine the following hypothetical results of Frim A and B. In the past ten year record, Firm A among 50 MBA holders, 20 are promoted as executives, while 30 among non-MBA, 10 are promoted. For firm B, among 40 MBA, 30 are promoted, while out of 70 non-MBA, 50 are promoted. Calculate promotion rates of MBA and non-MBA for firm A and B separately and then pool firm A and B together.

Question 2: What conclusions you draw from the calculation. Does MBA degree help promotion? How do you analyze this kind of statistics in decision making? What data and with what method you should use when you wish to answer the question of MBA and promotion?

Link the 01 Note: https://drive.google.com/file/d/1H0ICA3IUfRMhFGaWs8DfI8p1YFS1HJPZ/view?usp=sharing