Use the following to answer questions:
-(Table: Choice with Uncertainty) Look at the table Choice with Uncertainty. Suppose the probability that the sitcom does not make it to television is 60%, that it makes it to television but is not the most viewed show in its time slot is 30%, and that it makes it to television and is the most viewed show in its time slot is 10%. As a utility maximizer, Norman:
A) should keep his teaching job.
B) should quit his teaching job and go to Hollywood.
C) will be indifferent between leaving and staying, because his expected income is the same whether he stays a teacher or moves to Hollywood.
D) will be indifferent between leaving and staying, because his expected total utility is the same whether he stays a teacher or moves to Hollywood.

Question

Use the following to answer questions: 
-(Table: Choice with Uncertainty) Look at the table Choice with Uncertainty. Suppose the probability that the sitcom does not make it to television is 60%, that it makes it to television but is not the most viewed show in its time slot is 30%, and that it makes it to television and is the most viewed show in its time slot is 10%. As a utility maximizer, Norman:
A) should keep his teaching job. 
B) should quit his teaching job and go to Hollywood. 
C) will be indifferent between leaving and staying, because his expected income is the same whether he stays a teacher or moves to Hollywood. 
D) will be indifferent between leaving and staying, because his expected total utility is the same whether he stays a teacher or moves to Hollywood.

Quizplus · Accepted Answer

Norman should keep his teaching job because the probability of the sitcom not making it to television is high (60%), and the combined probability of it making it to television and being successful is low (10%). As a utility maximizer, he would choose the option with the highest expected utility, which is likely to be the more stable teaching job.

Use the Following to Answer Questions