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Find the Expected Value of the Optimal Strategy $6000\$ 6000 B) $13,000\$ 13,000

Question 201

Multiple Choice

Find the expected value of the optimal 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:
 Find the expected value of the optimal 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 0.15 . What is the farmer's expected profit if he picks the best strategy? A)   \$ 6000  B)   \$ 13,000  C)   \$ 5850  D)   \$ 10,500
Based on meteorological records from previous years, the farmer estimates the probability of flooding next year to be 0.15 . What is the farmer's expected profit if he picks the best strategy?


A) $6000\$ 6000
B) $13,000\$ 13,000
C) $5850\$ 5850
D) $10,500\$ 10,500

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