Crusoe expects to sell P or Q (or both) to Friday, for the same anticipated price of 10 clams. He regards the sale of P at that price as virtually a "sure thing." On the other hand, he thinks the price of Q might rise to 15 clams or fall to 5 clams, with about the same probability. His expected price is the same in both cases, but producing Q would present a greater degree of risk and uncertainty.
Crusoe's decision will also take into consideration the fact that Labor Type 1 and Labor Type 2 require different expenditures of time and present different degrees of disutility. In the formulations on the next page, "cost" refers to refers to subjective value-cost on his personal value scale. The inequality symbol "<" means "is lower on Crusoe's value scale."      Next page
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