An investment pays $1,500 half of the time and $500 half of the time. Its expected value and variance respectively are:
A. $2,000; (250,000 dollars)2
B. $1,000; 250,000 dollars
C. $1,000; 250,000 dollars2
D. $1,000; 500,000 dollars
Answer: C
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A rich nation will trade with a poor nation because the
A) poor nation has the absolute advantage in producing all products. B) poor nation has the comparative advantage in producing a product. C) rich nation has the comparative advantage in producing all products. D) rich nation has the absolute advantage in producing all products.
Suppose that the firms in an oligopolistic industry successfully collude. What will be the outcome? Explain
What will be an ideal response?
To avoid the winners curse
a. Bid as if you have estimated the valuation higher than any other bidder b. Bid as if you have estimated the valuation highest c. Bid as if you are the smartest of all the bidders d. Bid as if everyone else has a terrible estimate of the value of the product
A simple model of information acquisition for shopping predicts that, the larger the percentage of dealers in an area seen by the typical shopper, the _____ will be the dispersion of the prices _____ relative to their average
a. larger; the buyers pay b. larger; the dealers quote c. smaller; the buyers pay d. smaller; the dealers quote