What is expected utility?
What will be an ideal response?
Expected utility is the average utility arising from all possible outcomes.
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Due to the fact that Curly used his frequent flyer miles to fly to visit Moe, Curly told Moe that it didn't cost him anything to visit. Is Curly correct?
A. Yes, because Curly could stay at Moe's house for free. B. No, because Curly had to pay for earlier trips in order to earn the frequent flyer miles. C. No, because Curly could have used his frequent flyer miles to go somewhere else instead. D. Yes, because Curly's frequent flyer miles made the trip free.
Some economists argue that discrimination based on race and sex cannot lead to persistent wage differentials. What is their argument?
What will be an ideal response?
Suppose that the absolute price elasticity for cookies equals 0.8. We could then say that the demand for cookies is
A) elastic. B) inelastic. C) unit-elastic. D) perfectly elastic.
What is the difference between accounting profit and economic profit?
What will be an ideal response?