Summing the Product of a Gamble's Outcome and the Probability

question 15

Multiple Choice

Summing the product of a gamble's outcome and the probability of its occurrence for all possible outcomes is

• A)a fair gamble.
• B)the variance of the gamble.
• C)a useless calculation.
• D)the expected value of the gamble.

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Definitions:

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity of that good supplied.

Tax Implications

The effects that taxes have on the financial outcomes of activities, including the impact on overall costs and benefits in business and personal finance.

Point Elasticity

The measure of elasticity at a specific point on a demand or supply curve, reflecting the sensitivity of quantity demanded or supplied to a change in price.

Consumer Surplus

The variance between the aggregate sum consumers can and will pay for a good or service and the sum they truly pay.