Alex, who is risk-neutral, is looking for a one-bedroom apartment to rent for the month of August while he's on vacation in Seattle. All of the one-bedroom apartments in the neighborhood where he wants to stay are of equal quality, but 70 percent rent for $700 per month, 20 percent rent for $600 per month, and 10 percent rent for $500 per month. The first apartment Alex finds rents for $700 per month. Suppose Alex is risk-averse. If the cost to Alex of searching for another apartment is $40, then will he search for another apartment?
A. No, because searching for another apartment is a fair gamble.
B. No, because searching for another apartment is a less-than-fair gamble.
C. Yes, because searching for another apartment is a better-than-fair gamble.
D. Yes, because searching for another apartment is a fair gamble.
Answer: A
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The above figure shows the U.S. market for wheat. With international trade, the United States exports ________ of wheat
A) 300,000 tons B) 500,000 tons C) 700,000 tons D) 400,000 tons E) None of the above answers is correct because the United States imports wheat.
If a firm engages in a merger that substantially reduces competition, then it would be in violation of the:
a. Clayton Act. b. Robinson-Patman Act. c. Sherman Antitrust Act. d. Federal Trade Commission Act. e. Celler-Kefauver Antimerger Act.
The concept of loss aversion is:
A. preferring certain outcomes over uncertain ones. B. a general tendency for people to put more effort into achieving gains than avoiding losses. C. a general tendency for people to put more effort into avoiding losses than achieving gains. D. a spectrum of tolerance for risky situations.
Economists generally use GDP to measure a nation's total output because it is
a. equal to the sales value of all transactions conducted during a period and thus can be easily calculated. b. the best available measure of the true costs of producing consumer goods. c. unaffected by changes in the prices of products over time. d. a relatively reliable measure of the value of all final product goods and services produced during a specific time period.