Final answer:
Greg can correctly apply covariation theory in the scenario where Jerry refused to jump into the lake unlike his friends, demonstrating variance in behavior that could be context-specific, contrasting with actor-observer bias seen in other scenarios.
Step-by-step explanation:
When Greg is trying to analyze behavior according to the covariation theory, he should look for situations where Jerry's behavior varies systematically across different contexts. Among the provided options, the most accurate scenario for Greg to analyze using covariation theory would be: c) On their camping trip together, all of their other friends jumped off a cliff into the lake, but Jerry refused to follow.
This scenario reflects Jerry's behavior in a specific context where others acted differently, demonstrating a variance in behavior that could be situational rather than dispositional. This contrasts with the scenario where Greg assumes Jerry is a businessman based on his attire, which is an example of the actor-observer bias where dispositional factors are overemphasized in explaining others' behavior.