Dante has two possible routes to travel on a business trip. One is more direct but more exhausting, taking one day but with a probability of business success of 1/4. The second takes three days, but has a probability of success of 2/3.
If the value of Dante's time is 1000/day, the value of the business success is 12,000, and Dante is risk neutral, A) it doesn't matter which path he takes, because he doesn't consider risk.
B) he should take the 1-day trip, because he doesn't consider risk.
C) he should take the 1-day trip, because 11,000 is greater than 9,000.
D) he should take the 3-day trip, because it will increase his expected net revenue by 3,000.
E) he should take the 3-day trip, because it will increase his expected net revenue by 5,000.
Question 2
Refer to Scenario 3.1. What is the total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc)?
A) 4 utils
B) 10 utils
C) 30 utils
D) 40 utils
E) none of the above
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