Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. The expected value of the payoff is _____ for the first game and _____ for the second game.
A. $5.00; $4.50
B. $5.75; $4.50
C. $4.50; $5.75
D. $5.75; $5.25
B. $5.75; $4.50
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Which of the following is an explicit cost in Jim's business venture?
A) the salary Jim could have earned at another job B) the interest Jim does not earn because he invested his savings in his business C) the wages Jim pays his workers D) Jim's normal profit E) Answers A, B, and D are correct.
Creative destruction by innovation means
a. destruction of an innovative product once it fails in the market. b. introduction of an innovative product makes older substitute goods obsolete. c. substitute goods make innovative goods less competitive in the market. d. introduction of innovative goods increase the competition in the market
The required rate of return that an individual demands on a real estate investment is determined in the:
A. user market B. capital market C. government D. local market
A demand relationship that is a vertical line up from the quantity axis is
A. unit-elastic. B. perfectly inelastic. C. somewhat elastic. D. perfectly elastic.