Question: The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues (in thousanda) will vary with how well taxpayers comply with the new tax code.

# of workers ....low compliance ....medium compliance ....high compliance
1 ..............................50 ........................50 ........................50
2 ..............................100 ......................60 ........................20
3 ..............................150 ......................70 .......................-10

a. If he thinks the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what are the expected net revenues for the number of workers he will decide to hire?

b.
b. If he thinks the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what is his expected value of perfect information?