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A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign. Describe the production function for campaign votes. How might information about this function (such as the shape of the isoquants) help the campaign manager to plan strategy?
Bonus incentives. If a salesperson has gross sales of over in a year, then he or she is eligible to play the company’s bonus game: A black box contains twenty-dollar bill, five-dollar bills, and one-dollar bill. Bills are drawn out of the box one at a time without replacement until a twenty-dollar bill is drawn. Then the game stops. The salesperson’s bonus is times the value of the bills drawn.
(A) What is the probability of winning a bonus?
(B) What is the probability of winning the maximum bonus, , by drawing out all bills in the box?
(C ) What is the probability of the game stopping at the third draw?