TABLE 19-1 The Following Payoff Table Shows Profits Associated with a Set

question 317

Multiple Choice

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.
-Referring to Table 19-1, the opportunity loss for A3 when S2 occurs is

• A) 0.
• B) 4.
• C) 5.
• D) 6.

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Definitions:

Production Possibilities Frontier

A graph that shows the highest production potential for two products, based on available resources and various factors.

Means of Production

The resources—including land, labor, capital, and technology—used to produce goods and services in an economy.

Capital

Wealth in the form of money or assets, used in the production of more wealth.

Depression

An extended period of significant decline in economic activity across an economy, characterized by high unemployment, low consumer spending, and reduced industrial output.