Suppose option A has a higher expected value than option B. Which of the following statements is, in general, true?
A. A risk-averse person prefers option B to option A.
B. A risk-averse person prefers option A to option B.
C. A risk-neutral person is indifferent between options A and B.
D. Insufficient information to determine.
Answer: A
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The figure above shows that as a result of the tariff, consumer surplus in the United States
A) decreases by $105 million per year. B) increases by $55 million per year. C) decreases by $30 million per year. D) decreases by $20 million per year. E) remains unchanged.
Which of these economic variables is procyclical?
A) consumer spending B) stock prices C) the government bond spread D) all of the above E) none of the above
Consider the Battle of the Sexes game:
Jim- wrestling Jim - opera Joan - wrestling 2, 1 0, 0 Joan - opera 0, 0 1, 2 Suppose both players use mixed strategies for this game. Jim chooses wrestling with probability 0.9, and Joan chooses wrestling with probability 0.5. What are the expected payoffs for the players? A) The expected payoffs are 0.95 for Joan and 0.55 for Jim B) The expected payoffs are 0.55 for Joan and 0.95 for Jim C) The expected payoffs are 0.95 for both players D) The expected payoffs are 0.55 for both players
There are currently 1,000 firms in a competitive industry. Minimum long-run average cost is $80 and price $100. Explain what will happen to price, profit, and the number of firms in this industry over time.
What will be an ideal response?