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Use the Payoff Matrix to Determine the Best Strategy

Question 191

Multiple Choice

Use the payoff matrix to determine the best strategy.
-A farmer must decide on which of two pieces of land to grow his crops. The first piece of land has better soil and will yield a larger harvest. However this piece of land is low lying and is coastal and his crops will be destroyed in the event of a storm and flooding. The second piece of land has poorer soil and will yield a smaller harvest but is at a higher elevation and would not be affected by flooding. He estimates that the payoff matrix is as follows:
Use the payoff matrix to determine the best strategy. -A farmer must decide on which of two pieces of land to grow his crops. The first piece of land has better soil and will yield a larger harvest. However this piece of land is low lying and is coastal and his crops will be destroyed in the event of a storm and flooding. The second piece of land has poorer soil and will yield a smaller harvest but is at a higher elevation and would not be affected by flooding. He estimates that the payoff matrix is as follows:   Based on meteorological records from previous years, the farmer estimates the probability of flooding next year to be 0.1 . What is the farmer's best strategy? A)  Wait and see B)  Use the land that is at a higher elevation C)  Use the land that is at a lower elevation
Based on meteorological records from previous years, the farmer estimates the probability of flooding next year to be 0.1 . What is the farmer's best strategy?


A) Wait and see
B) Use the land that is at a higher elevation
C) Use the land that is at a lower elevation

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