Calculate the expected value of an investment that has the following payoff frequency: a quarter of the time it will pay $2,000, half of the time it will pay $1,000 and the remaining time it will pay $0.
What will be an ideal response?
The expected value = 1/4($2,000) + 1/2($1,000) + 1/4($0) = $1,000
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All natural monopolies are characterized by
a. decreasing marginal cost at the point where their marginal cost curve crosses their demand curve. b. the fact that they earn economic losses. c. decreasing average costs at the point where their average cost curve crosses their demand curve. d. the fact that losses can only be avoided if they are regulated.
Consider the monopolist depicted in the figure above. The profit maximizing level of output for a single-price monopolist is
A) 7. B) 11. C) 13. D) 22.
Behavioral economics under uncertainty documents that
A) people's behavior often differs from what standard expected utility theory predicts. B) people's behavior can change with their circumstances. C) people might put considerable weight on certain outcomes. D) All of the above.
Government spending is a leakage out of the circular flow of income and spending
a. True b. False Indicate whether the statement is true or false