Use the Information for the Question(s)below

question 69

Multiple Choice

Use the information for the question(s) below.
Consider an economy with two types of firms,S and I.S firms always move together,but I firms move independently of each other.For both types of firm there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-What is the expected return for an individual firm?

• A)14%
• B)3%
• C)5%
• D)-5%

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Definitions:

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Individual Contribution

The unique input or effort one person provides towards a group task or project.

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A social psychological phenomenon where a majority of group members privately reject a norm, but incorrectly assume that most others accept it, and therefore go along with it.

Psychology Class

An academic course that studies the mind and behavior, covering topics from social interactions to cognitive processes.