When Speculators Are Right, They

question 25

Multiple Choice

When speculators are right, they:

• A) move consumption of goods from times when they have a high value to times when they have a low value.
• B) move consumption of goods from times when they have a low value to times when they have a high value.
• C) often decrease economic efficiency since they raise prices in the short term.
• D) decrease the opportunity cost of current production.

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Definitions:

Expected Value

The mean of all potential outcomes of a random variable, adjusted according to their individual probabilities of occurrence.

Dipstick

A tool used for measuring the quantity of a liquid in a tank or container, commonly used for checking oil levels in engines.

Sealed-Bid

A bidding process where all bids are submitted confidentially to the auctioneer with no bidder knowing how much others have bid.

Lemons

In the context of economics, refers to products of lower quality that are difficult to distinguish from higher quality products before purchase. In a general context, it's a citrus fruit.