Question 1

A lottery game pays $500 with .001 probability and $0 otherwise.The variance of the payout is

Accepted Answer

A) 15.8. 
B) 249.50. 
C) 249.75. 
D) 499. 
A) 15.8. 
B) 249.50. 
C) 249.75. 
D) 499.

Question 2

Your friend Dimitre tells you that he thinks that his favorite basketball team has a 70% chance of winning the next game.This is an example of

Accepted Answer

A) an objective probability. 
B) a subjective probability. 
C) a risk-averse statement. 
D) Friedman-Savage preferences. 
A) an objective probability. 
B) a subjective probability. 
C) a risk-averse statement. 
D) Friedman-Savage preferences.

Question 3

The Arrow-Pratt measure of risk aversion is

Accepted Answer

A) negative if a person is risk averse. 
B) greater than one if a person is risk averse. 
C) negative if a person is risk loving. 
D) None of the above. 
A) negative if a person is risk averse. 
B) greater than one if a person is risk averse. 
C) negative if a person is risk loving. 
D) None of the above.

A lottery game pays $500 with .001 probability and $0 otherwise.The variance of the payout is

Your friend Dimitre tells you that he thinks that his favorite basketball team has a 70% chance of winning the next game.This is an example of

The Arrow-Pratt measure of risk aversion is

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 16: Uncertainty

A lottery game pays $500 with .001 probability and $0 otherwise.The variance of the payout is

Your friend Dimitre tells you that he thinks that his favorite basketball team has a 70% chance of winning the next game.This is an example of

The Arrow-Pratt measure of risk aversion is

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters