Economists Who Use Supply/demand Models

question 8

Multiple Choice

Economists who use supply/demand models:

• A) support the free market.
• B) oppose the free market.
• C) could support or oppose the free market.
• D) generally oppose the free market.

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Definitions:

Von Neumann-Morgenstern Utility Function

A mathematical representation of an individual's preference over a set of alternatives, based on the assumption of expected utility maximization.

Risk Lover

A person or entity that prefers to take risks, often in pursuit of higher rewards, rather than avoiding them.

Probability

A measure of the likelihood of a particular event or outcome occurring, expressed as a number between 0 and 1.

Expected Utility Maximizer

An individual who makes choices under uncertainty to maximize their expected level of satisfaction, based on the probabilities of different outcomes.