Answer the following statement(s) true (T) or false (F)
1. A risk-averse individual chooses to never place a bet.
2. Firms are more likely to exhibit risk-neutral behavior than are individuals.
3. Both ex ante and ex post preferences depend solely on the individual's tastes.
4. When a gamble is repeated many times, the average outcome is the expected value.
5. A risk-free basket has only one possible outcome.
1. False
2. True
3. False
4. True
5. False
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Many detrimental externalities occur because
A. persons do not pay the full social cost of using a resource. B. persons do not pay the full private cost of using a resource. C. companies do not pay the market price for natural resources. D. companies pay more than the full social cost of using a resource.
The government can help solve the information asymmetry problem by:
A. making it illegal to complete a transaction without complete information. B. requiring the more informed party to not use the imbalance to their advantage. C. providing the missing information to the less-informed party. D. All of these statements are true.
Becca is buying school supplies. She sees that she can buy a 150-page notebook for $2.00 and a set of pens for $6.00. As a result, she knows that a set of pens has the same value as three notebooks. This comparison of value best demonstrates money’s function as a ______.
a. unit of account b. means of deferred payment c. medium of exchange d. store of value
Which statement is true?
A. Most federal government revenue comes from the personal income tax. B. The federal personal income tax puts a greater burden on the poor and middle class. C. The United States is among the most highly taxed industrial countries. D. None of these statements are true.