The Figure Given Below Shows the Demand Curves [D₁ and D₂]

question 105

Multiple Choice

The figure given below shows the demand curves [D₁ and D₂] and the supply curve [S₁] of capital.Figure 17.1

-Shane holds wealth worth $10,000. He considers investing it equally in two gambles one of which has a probability of 0.6 to yield a return of 10% and the other has a probability of 0.4 to yield a return of 20%. What will be Shane's total expected return from the two gambles?

• A)$1,000
• B)$700
• C)$500
• D)$900
• E)$1,100

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Definitions:

Total Revenue

The total amount of money generated by a business from selling goods or services before any expenses are subtracted.

Loss-Minimizing

A strategy or approach aimed at reducing losses as much as possible, often used in business and economic contexts.

Marginal Cost

The cost incurred by producing one additional unit of a good or service.

Output

The total amount of goods and services produced by an economic system.