Question 1

When monetary value is not the sole measure of the true worth of the outcome to the decision maker,monetary value should be replaced by utility.

Accepted Answer

A) True 
 B)False

Question 2

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

Accepted Answer

A) has more than one equilibrium point. 
B) will have alternating winners. 
C) will have no winner. 
D) has a pure strategy solution. 
A) has more than one equilibrium point. 
B) will have alternating winners. 
C) will have no winner. 
D) has a pure strategy solution.

Question 3

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

Accepted Answer

A) True 
 B)False

Question 4

Explain how utility could be used in a decision where performance is not measured by monetary value.

Accepted Answer

Utility can be used in a decision where

Question 5

To assign utilities,consider the best and worst payoffs in the entire decision situation.

Accepted Answer

A) True 
 B)False

Question 6

Burger Prince Restaurant is considering the purchase of a $100,000 fire insurance policy.The fire statistics indicate that in a given year the probability of property damage in a fire is as follows: $$\begin{array} { l c c c c c c } 
\text { Fire Damage } & \$ 100,000 & \$ 75,000 & \$ 50,000 & \$ 25,000 & \$ 10,000 & \$ 0 \
\hline \text { Probability } & .006 & .002 & .004 & .003 & .005 & .980
\end{array}$$ 
a.If Burger Prince was risk neutral, how much would they be willing to pay for fire insurance?
b.If Burger Prince has the utility values given below, approximately how much would they be willing to pay for fire insurance? $$\begin{array} { l c c c c c c c } 
\text { Loss } & \$ 100,000 & \$ 75,000 & \$ 50,000 & \$ 25,000 & \$ 10,000 & \$ 5,000 & \$ 0 \
\hline \text { Utility } & 0 & 30 & 60 & 85 & 95 & 99 & 100
\end{array}$$

Accepted Answer

The answer of Burger Prince Restaurant is considering the purchase...

Question 7

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Accepted Answer

A) True 
 B)False

When monetary value is not the sole measure of the true worth of the outcome to the decision maker,monetary value should be replaced by utility.

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

Explain how utility could be used in a decision where performance is not measured by monetary value.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Times Series Analysis and Forecasting

Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, Finance, and Operations Management

Distribution and Network Models

Integer Linear Programming

Advanced Optimization Applications

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters

Exam 5: Utility and Game Theory

When monetary value is not the sole measure of the true worth of the outcome to the decision maker,monetary value should be replaced by utility.

If it is optimal for both players in a two-person,zero-sum game to select one strategy and stay with that strategy regardless of what the other player does,the game

Given two decision makers,one risk neutral and the other a risk avoider,the risk avoider will always give a lower utility value for a given outcome.

Explain how utility could be used in a decision where performance is not measured by monetary value.

To assign utilities,consider the best and worst payoffs in the entire decision situation.

The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.

Introduction

Introduction to Probability

Probability Distributions

Decision Analysis

Times Series Analysis and Forecasting

Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, Finance, and Operations Management

Distribution and Network Models

Integer Linear Programming

Advanced Optimization Applications

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Markov Processes

Filters