Question #1:

Doris had two job interviews last week and expects to get job offers from both. Today she got a call from Arec Co offering her an annual salary of $65,000 and they need an answer by the end of the day or they will give the job to someone else. She knows that LAC Inc. will have an offer to her next week. Based on her research, LAC Inc. has a 50% chance of offering $85,000 and a 50% chance of offering her $55,000. Should she take offer from Arec or wait for the offer from LAC Inc.?

She should wait for the job from LAC because it potentially has a much higher salary

She should take the offer from Arec because it is a guaranteed salary

She should wait for the offer from LAC because it has a higher expected value

She should take the offer from Arec because LAC has a lower expected value

Question #2:

A Motorcycle shop is located next to a Cafe. The noise from the motorcycles bothers the Cafe customers. If there was a soundwall it would reduce the noise and increase the number of customers at the Cafe. Using the table below. how much would the Cafe owner be willing to pay for sound walls to reduce the noise? Sound Wall No Sound Wall Dail rots V p $3000 {Motorcycle} Daily prots (Cafe) 0 $700 0 $350 0 $1100 0 $600