The above figure shows how an individual evaluates a bet in which he or she has a 0.5 probability of receiving $20 and a 0.5 probability of receiving $200. The individual would be indifferent between
A) $110 with certainty or the expected value of the bet.
B) $80 with certainty or the expected value of the bet.
C) $200 with certainty or the expected value of the bet.
D) $20 with certainty or the expected value of the bet.
B
You might also like to view...
Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP
a. True b. False Indicate whether the statement is true or false
In a planned economy, the concept of efficiency is
A. more important than in a market economy. B. less important than in a market economy. C. not important at all. D. as important as in a market economy.
Which of the following would result in a movement along the production possibilities curve?
A. a change in the outputs of two goods that a society chooses to produce B. growth in the capital stock C. population growth D. a fall in the unemployment rate
One World View article is titled "Flat Panels, Thin Margins." New firms continue to enter the industry even though prices are falling because
A. Normal profits are being earned. B. Economic profits are being earned. C. Total costs are greater than total revenues. D. Total costs equal total revenues.