Bob Invests $75 in an Investment That Has a 50

question 68

Multiple Choice

Bob invests $75 in an investment that has a 50% chance of being worth $100 and a 50% chance of being worth $0. From this information we can conclude that Bob is

• A)risk preferring.
• B)risk neutral.
• C)risk averse.
• D)irrational.

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Definitions:

Long-Run Supply Curve

A curve that shows the relationship between market prices and quantities supplied over a period when all production inputs are variable.

Mad Cow Disease

A neurological disorder in cattle that can be transmitted to humans, causing a fatal brain disease.

Economic Profits

Profits exceeding the opportunity costs of all resources used by a firm.

Industry Supply Curve

A graphical representation showing the total amount of a commodity that all producers in an industry are willing and able to supply at different prices.