You've saved $6,000. You decide to treat yourself by spending $2,000 on something fun. You're thinking...

 

Transcribed Image Text:

You've saved $6,000. You decide to treat yourself by spending $2,000 on something fun. You're thinking about going to a resort in Jamaica, a place you've never been. If it's real fun, you think it might be worth $4,000 in value to you. If it's just OK, it will be worth $2,000. If it's a bust it will be worth -$1,000 (a negative) because you'll be mad that you wasted your time and money. If you judge the odds as 50% real fun, 25% just OK and 25% a bust, should you book the trip? You've saved $6,000. You decide to treat yourself by spending $2,000 on something fun. You're thinking about going to a resort in Jamaica, a place you've never been. If it's real fun, you think it might be worth $4,000 in value to you. If it's just OK, it will be worth $2,000. If it's a bust it will be worth -$1,000 (a negative) because you'll be mad that you wasted your time and money. If you judge the odds as 50% real fun, 25% just OK and 25% a bust, should you book the trip?

Answer rating: 100% (QA)

Based on the expected valueit seems like the trip is worth bookingLets break it down The possible ou... View the full answer