A manager believes there is a 10 percent chance their firm will have to pay $1,000,000 and a 90 percent chance they will be found innocent and pay nothing except the legal fees of $200,000. If the manager is offered a settlement deal of $300,000 (the manager's firm would pay the plaintiff $300,000), and the manager flips a coin to decide if they should settle or not, which of the following
statements is true?
A) The manager is risk averse.
B) The manager is risk neutral.
C) The manager is a risk lover.
D) The manager is risk intolerant.
B) The manager is risk neutral.
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According to Keynesian economists,
a. the economy will return quickly to full employment in most cases b. if output is below its potential, the economy will soon return to full employment c. production can be stuck below its full-employment level for extended periods of time d. the Great Depression proved that classical economics does a good job of explaining how the economy operates e. he economy will achieve full employment in the short run but, in the long run, GDP will fluctuate
Historical note: In separate court cases, ALCOA and DuPont both faced charges brought by the government that they
a. flooded the market with output to undermine its competition b. charged excessively high prices c. imposed illegal barriers to entry in their respective markets d. monopolized their markets e. sought to create monopolistic competition in their markets
If there is an increase in government spending, then, ceteris paribus, the IS curve:
A) will shift to the left. B) will shift to the right. C) will not shift at all. D) will shift to the left if there is a corresponding decrease in taxes.
lloyd of London is perhaps most known for:
A. going out of business when it insured too many odd risks. B. offering insurance against unusual risks. C. being the largest insurance company in the world. D. being the oldest insurance company in the world.