1. How many decisions are in the decision tree below?

a. 1

b. 2

c. 3

d. more than 3

2. There are two options for producing a product, A and B. Option B has a lower fixed cost than Option A, but a higher variable cost. If the fixed cost of Option A was increased, then the level of production that causes both options to have the same total cost would

a) increase.

b) decrease.

c) stay the same.

3. There is a 20% chance the outcome is a gain of $100 and an 80% chance the outcome is a loss of $100. What is the expected value of the outcome?

a) $10,000.

b) $60.

c) $0

d) -$60

e) none of the above.