Use the following to answer question:
-(Table: Natasha's Total Utility)Use Table: Natasha's Total Utility.Natasha earns $50,000 per year but faces losing $20,000 of it if she is late with her work.If there is a 25% probability that Natasha will be late with her work and her income will then equal $30,000,her expected income is:
A)$32,500.
B)$38,200.
C)$40,500.
D)$45,000.

Question

Use the following to answer question: 
-(Table: Natasha's Total Utility)Use Table: Natasha's Total Utility.Natasha earns $50,000 per year but faces losing $20,000 of it if she is late with her work.If there is a 25% probability that Natasha will be late with her work and her income will then equal $30,000,her expected income is:
A)$32,500. 
B)$38,200. 
C)$40,500. 
D)$45,000.

Quizplus · Accepted Answer

Natasha's expected income is calculated as: (0.75 * $50,000) + (0.25 * $30,000) = $45,000.

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