​The Following Is Not an Example of Risk Aversion

question 61

Multiple Choice

​The following is not an example of risk aversion

• A)​you lock your garage when you have expensive workshop tools
• B)you are more careful when you buy a more expensive car
• C)Individuals tend to gamble more with their money when the future is certain
• D)​you only go swimming when the lifeguard is not on duty

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Definitions:

Increasing-cost Industry

An industry in which the costs of production increase as the industry expands, often due to limitations in resources or factors of production.

Long-run Supply Curve

A graphical representation showing the relationship between price and quantity supplied over a longer period, when all inputs can be varied.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied changes by an infinite amount in response to any price change, depicted as a horizontal line on a graph.

Long-run Equilibrium

A state in which all factors of production are variable, leading to a situation where firms only earn normal profits and no incentives exist for entering or exiting the industry.