A manager bidding in an auction with independent private values for a large piece of industrial equipment has estimated that the expected profit from the equipment is $10 million. If the manager is indifferent about the uncertainty surrounding the expected profit of the equipment, the manager is ________ and the manager's value of the truck is ________.
A) risk averse; $10 million
B) risk neutral; $10 million
C) risk averse; less than $10 million
D) risk neutral; less than $10 million
B) risk neutral; $10 million
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If the supply of labor ________, real wages rise and the amount of labor employed ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
A carbon tax which is designed to reduce pollution is an example of a
A) noneffective incentive. B) command-and-control policy. C) market-based policy. D) government administrative rule.
A demand curve usually has a
a. negative slope because price and quantity demanded are inversely related b. negative slope because as price rises, demand falls c. positive slope because price and quantity demanded are positively related d. positive slope because price and quantity demanded are inversely related e. slope of zero because there is no change along a demand curve when everything else is held constant
A production possibilities frontier indicates the most efficient combinations of goods
a. True b. False Indicate whether the statement is true or false