You wish to work this summer to save money for college. Your goal is to maximize the amount of money you earn working. After spending a week looking for the right job, you have narrowed your prospects to two choices. Your first option is to wait tables at a local restaurant. The manager at the restaurant has guaranteed you 40 hours per week for 12 weeks. Your pay will be $4 per hour plus tips. Naturally, the amount of tips you earn depends on how busy the restaurant is and on your people skills. Not having waited tables in the past, you believe that you have a 50% chance of earning $3 per hour in tips and a 50% chance of earning $6 per hour in tips. Your second option is to work as a checkout clerk at the local supermarket for $8.25 per hour. Similar to the restaurant, the manager of the local supermarket has guaranteed you 40 hours per week for 12 weeks.

Required:
a. How much money would you earn working as a checkout clerk this summer?
b. How much money would you expect to earn waiting tables this summer?
c. Based on your calculations in parts (a) and (b), what summer job would you take? Can you see where someone else might make a different choice?