The Foreclosure Crisis Has Been Particularly Devastating in Housing Markets

question 85

Multiple Choice

The foreclosure crisis has been particularly devastating in housing markets in much of the south and west United States, but even when analysis is restricted to relatively strong housing markets the numbers are staggering. For example, in 2017 an average of three residential properties were auctioned off each weekday in the city of Boston, up from an average of one per week in 2011. What is the probability that exactly four foreclosure auctions occurred on a randomly selected weekday of 2017 in Boston?

• A) 0.1680
• B) 0.1954
• C) 0.2240
• D) 0.8153

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Definitions:

Competitive Market

A market structure where many firms offer products or services that are similar, leading to high levels of competition.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to optimal distribution of resources.

MR = MC

An economic principle where the marginal revenue (MR) equals the marginal cost (MC), often used as a condition for profit maximization.

ATC = AVC

Indicates that the Average Total Cost equals the Average Variable Cost, a condition found at the minimum point of the Average Total Cost curve in economic analysis.