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Homework answers / question archive / Leah Johnson, director of Legal Services of Brookline, wants to increases capacity to provide free legal advice but must decide whether t do so by hiring another full time lawyer or by using part time lawyers

Leah Johnson, director of Legal Services of Brookline, wants to increases capacity to provide free legal advice but must decide whether t do so by hiring another full time lawyer or by using part time lawyers

Accounting

Leah Johnson, director of Legal Services of Brookline, wants to increases capacity to provide free legal advice but must decide whether t do so by hiring another full time lawyer or by using part time lawyers. The table below shows the expected costs of the two options for three possible demand levels.

 

  States of Nature
Alternatives Low Demand Medium Demand High Demand
Hire full-time $300 $500 $700
Hire part-time $0 $350 $1,000
Probabilities .2 .5 .3

 

Using expected value, what should Ms. Johnson do?

Option 1

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