The Expected Monetary Return of a Lottery, Gamble, or Investment

question 28

Multiple Choice

The expected monetary return of a lottery, gamble, or investment, determined by taking a weighted average of the monetary prizes offered using the associated probabilities as weights is called

• A) expected rate of return
• B) expected utility
• C) expected monetary value

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Definitions:

Wage Rate

The amount of compensation paid to employees per unit of time worked, often expressed per hour or year.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a particular input, assuming all other inputs remain constant.

Wage Rate

The amount of money a worker is paid per unit of time, such as an hour or a month.

Marginal Revenue Product

The extra income produced by using an additional unit of a production input.