Explain why risk can be insured against but uncertainty cannot
What will be an ideal response?
The provider of insurance policies can assign probabilities to the occurrences of insurable events and calculate premium rates to charge. With uncertainty, no probabilities can be attached to such events and it isn't possible to construct the appropriate premium rates.
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Disney and Fox must decide when to release their next films. The revenues received by each studio depend in part on when the other studio releases its film. Each studio can release its film at Thanksgiving or at Christmas
The revenues received by each studio, in millions of dollars, are depicted in the payoff matrix above. Which of the following statements CORRECTLY describes Disney's strategy given what Fox's release choice may be? A) If Fox chooses a Thanksgiving release, Disney should choose a Christmas release. B) If Fox chooses a Christmas release, Disney should choose a Thanksgiving release. C) Disney should release on Thanksgiving regardless of what Fox does. D) Both answers A and B are correct.
Which of the following contracts is considered self-enforcing?
a. An assurance provided by a lawyer to his/her client to win a case. b. A futures contract purchased through a NYSE broker. c. An agreement between two oligopolists to follow uniform pricing strategy. d. An agreement between two students to share assignment responsibility.
As a country's human capital increases, we observe that
A. Sector service jobs decreases. B. Worker productivity increases. C. Labor-intensive production processes increases. D. None of the choices are correct.
If protective import-restricting tariffs are imposed by a country, in the majority of cases that nation's consumers end up
A) paying a higher price for the good than they otherwise would. B) paying a lower price for the good than they otherwise would. C) consuming more of the good than they otherwise would. D) having a higher standard of living than they otherwise would.