On any given day, a salesman can earn $0 with a 20% probability, $100 with a 40% probability, or $300 with a 20% probability. Calculate the expected value and variance of his earnings, and interpret
What will be an ideal response?
E(X) = (0 ∗ .2 ) + (100 ∗ .4 ) + (300 ∗ .2 ) = $100
Variance(X) = .2 + .4(100 - 100)2 + .2(300 - 100)2 = 2000 + 0 + 8000 = 10,000.
E(X) tells us that her earnings will average $100 per day if she stays at this job over a long time period. The variance is a measure of how risky her income is.
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Justice Department is most likely to file charges under the A) Sherman Act. B) Wheeler-Lea Act. C) Robinson-Patman Act. D) FTC Act.
An increase in the money supply
a. and an investment tax credit both cause aggregate demand to shift right. b. and an investment tax credit both cause aggregate demand to shift left. c. causes aggregate demand to shift right, while an investment tax credit causes aggregate demand to shift left. d. causes aggregate demand to shift left, while an investment tax credit causes aggregate demand to shift right.
Based on the graph showing the run-up of nominal home prices, home prices first began a long upward trend in the ______.
a. 1910s
b. early 1930s
c. 1940s
d. early 1990s
Table 8-1 Item Amount (billions) Personal Consumption Expenditures 600 Depreciation 50 Wages 800 Indirect Business Taxes 10 Rental Income 25 Gross Private Domestic Investment 150 Corporate Profits 75 Net Exports 5 Government Purchases of Goods and Services 200 Government Transfer Payments 50 According to the data in Table 8-1, the value of NNP is
A. 900 B. 805 C. 750 D. 705