Explain the following: Risk results from the fact that more outcomes could happen than will happen.
What will be an ideal response?
Risk results from uncertainty, not knowing what will happen. For example before a coin is flipped we know that there are two possible outcomes, heads or tails. Once the coin is flipped, there will only be one outcome. The risk is in not knowing a priori what is going to happen. If there is only one possible outcome, there is certainty and therefore, no risk.
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In the political marketplace, firms do all of the following EXCEPT
A) vote. B) pay taxes. C) evaluate policy proposals of politicians. D) benefit from public goods and services.
State banks failed to find a way to print money under the Constitution
Indicate whether the statement is true or false
Which of the following is heavily subsidized by state and local governments?
A) Medicare B) Social Security C) public education D) food stamps
Just like a monopolist, a monopolistically competitive firm:
A. cannot sell additional units of output without lowering the price. B. is a price taker. C. sets the price according to marginal revenue and marginal cost; the demand curve doesn't matter. D. faces a perfectly elastic demand curve.