The key distinction between risk and uncertainty is
a. Risk cannot be quantified, priced or traded
b. Uncertainty refers to not knowing possible outcomes or their probabilities
c. Uncertainty is modeled by listing the possible outcomes and assigning probabilities to the outcomes
d. Risk has to do with not knowing the probability distribution of a random variable
b
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A(n) ________ in private expenditures as a result of a(n) ________ in government purchases is called crowding out
A) increase; increase B) decrease; decrease C) decrease; increase D) increase; decrease
The largest U.S. economic downturn between 1890 and the present occurred during which of the following events?
a. The Buffalo Head Nickel Panic b. The Rich Man's Panic c. The Great Depression d. The Great Banana Crisis of 1897
A publishing house is using 400 printers and 200 printing presses to produce books. The printers' wage rate is $20 and the price of a printing press is $100. The last printer added 20 books to total output, while the last press added 50 books to total output. In order to maximize the number of books published with a budget of $28,000, the publishing house
A. should use more presses and fewer printers because the last dollar spent on a press yielded more output than the last dollar spent on a printer. B. should continue to use 400 printers and 200 presses. C. should use more printers and fewer presses because printers cost less than presses. D. should use more presses and fewer printers because the marginal output of the last press was more than the marginal output of the last printer. E. should use more printers and fewer presses because the last dollar spent on a printer yielded more output than the last dollar spent on a press.
An application of the substitute principle would be if the price of Pepsi decreases, then the demand for Coke would____________
a. increase (shift to the left) b. increase (shift to the right) c. decrease (shift to the left) d. decrease (shift to the right)