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-Gunnar Can Work as a Campus Security Officer at a Guaranteed

Question 142

Multiple Choice

  -Gunnar can work as a campus security officer at a guaranteed salary of $20,000 per year or as a real estate agent. If Gunnar works as a real estate agent, there is a 50 percent chance that he will earn $10,000 per year and a 50 percent chance that he will earn $30,000 per year. Based on the above table, to maximize his expected utility, Gunnar will A)  choose to work as a campus security officer. B)  choose to work as a real estate agent. C)  be indifferent between being a campus security officer and being a real estate agent. D)  It is impossible to tell which job he would prefer without additional information.
-Gunnar can work as a campus security officer at a guaranteed salary of $20,000 per year or as a real estate agent. If Gunnar works as a real estate agent, there is a 50 percent chance that he will earn $10,000 per year and a 50 percent chance that he will earn $30,000 per year. Based on the above table, to maximize his expected utility, Gunnar will


A) choose to work as a campus security officer.
B) choose to work as a real estate agent.
C) be indifferent between being a campus security officer and being a real estate agent.
D) It is impossible to tell which job he would prefer without additional information.

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