If the Wage Rate Paid in the Fast-Food Outlets in a Small

question 113

Multiple Choice

If the wage rate paid in the fast-food outlets in a small town is greater than the reservation wage of all the teenagers in the town and less than the reservation wage of all the adults, then the fast-food outlets will hire

• A) mostly adults and a few teenagers.
• B) some adults and some teenagers.
• C) only adults.
• D) only teenagers.

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Definitions:

Expected Variance

A statistical measure that represents the dispersion of possible returns of an investment, used in portfolio theory to gauge risk.

Probability Distribution

A quantitative function that assesses and represents every imaginable value and probability for a random variable within a certain limit.

Stock of the Economy

An aggregate representation of the total value of all publicly traded companies within an economy.

Nominal Rate of Interest

The stated interest rate of a bond or loan without adjusting for inflation or other factors that affect the true cost of borrowing.