If Individuals 4 and 7 Have a Child, What Is

question 1

Multiple Choice

If individuals 4 and 7 have a child, what is the probability that the child will exhibit the trait?

• A)1/4
• B)1/2
• C)1/6
• D)2/3
• E)0

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Definitions:

Work Effort

A term used to quantify the amount of physical or mental exertion put forth by employees or workers in the production of goods or services.

Incentive Compatibility

A concept in mechanism design that ensures the strategies that maximize participants' payoffs also lead to outcomes desired by the mechanism's designer.

Consumers Budget Constraint

A consumer's budget constraint represents the combination of goods and services they can afford with their income and prices.

Adverse Selection

A situation in economic theory where information asymmetry results in high-risk individuals being more likely to apply for insurance or credit, potentially leading to market failure.