Question: Consider the following decision problem S1 (.25) S2 (.25) S3 (.5) Action 1 $25 $25 $49 Action 2 $0 $100 $36 Action 3 $0 $0

Consider the following decision problem

S1 (.25) S2 (.25) S3 (.5)

Action 1 $25 $25 $49

Action 2 $0 $100 $36

Action 3 $0 $0 $81

a. Suppose the decision makers utility u of money is linear. Which action should be chosen according to PMEU?

b. Suppose the decision makers utility u of money is given by u(x) = square root of x. Which act should be chosen by PMEU?

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