Scenerio: Aline and Sarah decide to go into business together as economic consultants. Aline believes they have a 50-50 chance of earning $200,000 a year, and that if they don't, they'll earn $0. Sarah believes they have a 75% chance of earning $100,000 and a 25% chance of earning $10,000. 1) Refer to Scenario above. The expected value of the undertaking, A) according to Sarah, is $75,000. B) according to Sarah, is $100,000. C) according to Sarah, is $110,000. D) according to Aline, is $200,000. E) according to Aline, is $100,000. 2) Refer to Scenario above. The probabilities discussed in the information above are: A) objective because they are single numbers rather than ranges. B) objective because they have been explicitly articulated by the individuals involved. C) objective because the event hasn't happened yet. D) subjective because the event hasn't happened yet. E) subjective because they are estimates made by individuals based upon personal judgment or experience. Major Probability of Receiving an Offer in One Year Average Salary Offer Accounting .95 $25,000 Economics .90 $30,000 English .70 $24,000 Poli Sci .60 $18,000 Mathematics 1.00 $21,000 3) Refer to Table above. Expected income for the first year is: A) highest in accounting. B) highest in mathematics. C) higher in English than in mathematics. D) higher in political science than in economics. E) highest in economics. 4) Refer to Table above. Ranked highest to lowest in expected income, the majors are: A) economics, accounting, English, mathematics, political science. B) mathematics, English, political science, accounting, economics. C) economics, accounting, mathematics, English, political science. D) English, economics, mathematics, accounting, political science. E) accounting, English, mathematics, political science, economics. Company Good Year Revenue Bad Year Revenue Number of Good Years Whizbo $8 million $6 million 8 Yowzo $10 million $4 million 4 Zowiebo $30 million $1 million 1 5) Refer to Scenario above. Where is the highest expected revenue, based on the 10 years' past performance? A) Whizbo B) Yowzo C) Zowiebo D) Whizbo and Yowzo E) Yowzo and Zowiebo 6) Refer to Scenario above. Based on the 10 years' past performance, what is the probability of a good year for Zowiebo? A) 30/31 B) 1/31 C) 0.9 D) 0.1 7) Refer to Scenario 5.3. Based on the 10 years' past performance, rank the companies' expected revenue, highest to lowest. A) Whizbo, Yowzo, Zowiebo B) Whizbo, Zowiebo, Yowzo C) Zowiebo, Yowzo, Whizbo D) Zowiebo, Whizbo, Yowzo E) Zowiebo, with Whizbo and Yowzo tied for second 8) Refer to Scenario 5.3. The expected revenue from all three companies combined is: A) $11 million B) $17.9 million. C) $25.5 million. D) $29.5 million. E) $48 million.