Alan solved the proportion StartFraction x over 200 EndFraction = StartFraction 8 over 25 EndFraction as shown. StartFraction x over 200 EndFraction = StartFraction 8 over 25 EndFraction. (8) (x) = (25) (200). 8 x = 5,000. StartFraction 8 x over 8 EndFraction = StartFraction 5,000 over 8 EndFraction. X = 625. What is Alan’s error? He got the wrong product when he multiplied 25 by 200. He got the wrong quotient when he divided 5,000 by 8. He mixed up the positions of 8 and 25 in the equation (8) (x) = (25) (200). He mixed up the positions of 8 and 200 in the equation (8) (x) = (25) (200)

Mobon oil company owns a lease that entitles it to explore for oil on a parcel of offshore land in california. since the lease is about to expire mobon must now decide whether to drill for oil at the site or to sell the lease to excel oil company, which has just offered mobon $50,000. mobon estimates it would cost $100,000 to drill at the site. if the well were dry, all this cost would be lost. if the well were successful, its value to mobon would depend on the extent of the oil discovered. for simplicity, mobon assumes there are only two types of successful wells: minor and major success. mobon estimates that a minor success would result in revenues of $200,000 in excess of the drilling cost, whereas a major success would result in revenue of $500,000 in excess of the drilling cost. mobon has assessed the following probabilities: if the well is dry then the probability is 0.7, if it is a minor success the probability is 0.2, and if it is a major success the probability is 0.1. a) construct an appropriate payoff matrix, b) using the maximax criterion, identify the optimal decision c) using the maximin criterion, identify the optimal decision d) using the minimax criterion, identify the optimal decision e) using the emv criterion, identify the optimal decision