Becky and michele are both shopping for a new car at two different dealerships. dealership a is offering $500 cashback on any purchase, while dealership b
is offering $1,000 cash back. the tax rate is 5% at dealership a but 8% at dealership b. becky wants to buy a car that is $15,000, and michele is planning to buy a car that costs $20,000. use algebraic expressions to you answer the following question.
1. at which dealership will becky get the better deal? how much does she save?
2. at which dealership will michele get the better deal? how much does she save?
3. what gerneralization can you make that would any shopper know which dealership has the better deal? at which price point would the two deals be equal.

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