For this assignment, you are required to complete Individual Problems 17-2 and 17-6 at the end of Chapter 17 in Managerial Economics: A Problem Solving Approach. In addition, you are required to complete Group Problem G17-1: Uncertainty. As you are evaluating your current company, address the following decisions in your response (500-750 words):
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
17-2
GameShowUncertaintyInthefinalroundofaTVgameshow,contestantshaveachancetoincreasetheircurrentwinningsof$1millionto$2million.Iftheyarewrong,theirprizeisdecreasedto$500,000.Acontestantthinkshisguesswillberight50%ofthetime.Shouldheplay?Whatisthelowestprobabilityofacorrectguessthatwouldmakeplayingprofitable?
17-6
HiringTheHRdepartmentistryingtofillavacantpositionforajobwithasmalltalentpool.Validapplicationsarriveeveryweekorso,andtheapplicantsallseemtobringdifferentlevelsofexpertise.Foreachapplicant,theHRmanagergathersinformationbytryingtoverifyvariousclaimsonresumes,butsomedoubtaboutfitalwayslingerswhenadecisiontohireornotistobemade.WhataretheTypeIandIIdecisionerrorcosts?WhichdecisionerrorismorelikelytobediscoveredbytheCEO?HowdoesthisaffecttheHRmanager’shiringdecisions?
G17-1
Uncertainty
Describe a decisionyourcompanyhasmadewhenfacinguncertainty.Computetheexpectedcostsandbenefitsofthedecision.Offeradviceonhowtoproceed.Computetheprofitconse-quencesoftheadvice.
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