You Roll a Pair of Dice

question 49

True/False

You roll a pair of dice. You bet $1 that you will get 2, 3, or 12. If you win, you are paid $9, for a profit of $8; if you lose, you lose your wager. This is a fair game.

Identify and justify the use of taxes or subsidies to achieve social optimum.

Analyze the impact of externalities on private and social costs and benefits.

Explain the concept of market equilibrium and how it is affected by externalities.

Understand the role of governmental policies in correcting market failures due to externalities.

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Definitions:

Perception

The way in which something is regarded, understood, or interpreted by an individual or group.

Sensory Information

Describes data gathered through the senses such as sight, sound, touch, taste, and smell, which is used by organisms to interact with their environment.

Personality

The combination of emotional, attitudinal, and behavioral response patterns of an individual.

Value System

An individual or group's hierarchy of beliefs and attitudes that fundamentally influence behavior and decision-making.