Scenario 5.2: Randy and Samantha Are Shopping for New Cars (One Each)

question 91

Multiple Choice

Scenario 5.2:
Randy and Samantha are shopping for new cars (one each) . Randy expects to pay $15,000 with 1/5 probability and $20,000 with 4/5 probability. Samantha expects to pay $12,000 with 1/4 probability and $20,000 with 3/4 probability.
-Refer to Scenario 5.2. Randy's expected expense for his car is:

• A) $20,000.
• B) $19,000.
• C) $18,000.
• D) $17,500.
• E) $15,000.

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Definitions:

Recession

A significant decline in economic activity across the economy, lasting longer than a few months, characterized by falling GDP, income, employment, manufacturing, and retail sales.

Liberal Economists

Economists who advocate for open markets, free trade, and minimal government intervention in the economy.

Spending Increases

A rise in the amount of money spent by consumers, businesses, or the government on goods and services.

Federal Budget Deficit

is the financial shortfall when the government's expenditures exceed its revenues within a given fiscal year.