You Have a Decision to Invest $10,000 in Any of Four

question 29

Multiple Choice

You have a decision to invest $10,000 in any of four different companies. You estimate the
Probabilities that the economy will be favorable or unfavorable and you estimate the percent
Returns over the next year.
Based on the maximin criterion, what is the choice?

• A) Company 1
• B) Company 2
• C) Company 3
• D) Company 4

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Definitions:

Prefabricated Garages

Buildings for storing vehicles that are manufactured off-site in advance, usually in standard sections that can be easily shipped and assembled.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets or to different buyers.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, indicating the financial gain realized when accounting for opportunity costs.