Some people prefer more risky projects than less risky projects. But some people prefer less risky projects to those that are more risky. What explains this behavior?
What will be an ideal response?
This behavior is explained through preferences. Those persons who prefer the risky gamble to
the sure thing are referred to as risk lovers. Those who prefer the sure thing are risk adverse.
In some analysis, the key is to set up payoffs to make a person indifferent between taking the
risk or not.
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Which of the following is true of monopolistic competition?
A) There is only one seller in this market structure. B) The product sold by each seller in this market structure is identical. C) The firms in this market structure earn huge economic profits in the long run. D) There are a large number of sellers each selling a differentiated product.
Suppose that the price elasticity of demand for museum tickets is equal to –1.8 . If the price of a museum ticket rises by 30 percent, what will happen to quantity demanded?
What will be an ideal response?
Refer to Figure 19-12. The graph above, depicts supply and demand for U.S. dollars during a trading day. At a fixed exchange rate of 0.30 pounds per dollar, the dollar is ________ versus the pound
A ________ of the dollar would correct the fundamental disequilibrium that exists in this market. A) overvalued; revaluation B) overvalued; devaluation C) undervalued; devaluation D) undervalued; revaluation
Union membership fell in the
A. 1940s. B. 1950s. C. 1960s. D. 1980s.