Refer to the scenario above. How much should he pay for the painting if he thinks that there is a 70% chance that the painting he is buying is original?
A) $50,000
B) $35,000
C) $70,000
D) $15,000
B
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Economists have used the ultimatum game and the dictator game in experiments designed to determine
A) whether consumers believe it is fair for producers to raise the price of a product for which there is excess demand. B) whether consumers understand the difference between implicit costs and explicit costs. C) whether consumers understand the rule of equal marginal utility per dollar spent. D) whether consumers care about fairness when they make decisions.
Why are decision trees useful to managers who plan business strategies?
A) Decision trees can be used to increase the amount of product differentiation; this enables managers to charge higher prices for their products. B) Decision trees provide a systematic way of thinking through the implications of a strategy. C) Using a decision tree always leads to a dominant strategy. D) Decision trees explain the level of concentration in an industry.
Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves. This suggests that the microwave industry is a decreasing-cost industry
Indicate whether the statement is true or false
The money multiplier yielded by the deposit creation formula assumes that
a. banks hold no excess reserves. b. banks hold excess reserves. c. recipients of loans take some of the proceeds in cash. d. recipients of loans do not redeposit their funds in other banks.