A manager believes there is a 10 percent chance their firm will have to pay $500,000, a 20 percent chance that they will have to pay $400,000 and a 70 percent chance they will be found innocent and pay nothing except the legal fees of $100,000. If the manager chooses to not enter into the litigation and to settle for $230,000 (pay the plaintiff), which of the following is true?
A) The manager is risk intolerant.
B) The manager is a risk lover.
C) The manager is risk neutral.
D) The manager is risk averse.
D) The manager is risk averse.
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An increase in the demand for washing machines might be caused by
A. a decrease in the number of buyers. B. an expected increase in the price of washing machines. C. a decrease in the price of washing machines. D. an expected decrease in the price of washing machines.
There are very few non-price means of undermining cartel agreements to restrict competition among members
a. True b. False Indicate whether the statement is true or false
Most economists
A. favor tariffs. B. favor quotas. C. advocate "fair trade." D. Economists do not favor any of these.
Comparative advantage in production of the good measured on the horizontal axis is identified with a straight-line production possibilities frontier that has a slope that is
A. positive. B. larger in magnitude (or absolute value) and positive. C. larger in magnitude (or absolute value). D. smaller in magnitude (or absolute value).