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Unformatted text preview: Econ 326 Fall 2011 In class quiz #3, open book Please enter your name, student ID, and answers in scantron. The information in the table below describes choices for a new doctor. The outcomes represent different macroeconomic environments, which the individual cannot predict. Table 5.3 Outcome 1 Outcome 2 Job Choice Prob. Income Prob. Income Work for HMO 0.95 $100,000 0.05 $60,000 Own practice 0.2 $250,000 0.8 $30,000 Research 0.1 $500,000 0.9 $50,000 1) Refer to Table 5.3. Rank the doctor's job options in expected income order, highest first. 1) _______ A) Open own practice, work for HMO, do research. B) Work for HMO, do research, open own practice. C) Do research, work for HMO, open own practice. D) Work for HMO, open own practice, do research. E) Do research, open own practice, work for HMO. 2) Refer to Table 5.3. In order to weigh which of the job choices is riskiest, an individual should look at 2) Refer to Table 5....
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- Fall '08
- Standard Deviation, HMO, average squared deviation, HMO choice