If There Is a 25% Probability That Joseph Will Earn

question 147

Multiple Choice

If there is a 25% probability that Joseph will earn $10 per hour at his job today and a 75% probability that he will earn $20 per hour today,his expected pay per hour is:

• A)$10.00.
• B)$15.00.
• C)$17.50.
• D)$20.00.

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Definitions:

Spreading Effect

The financial strategy of distributing investments across various assets to reduce risk and potentially increase returns.

Fixed Cost

Costs that do not vary with the level of output or activity.

Output

The aggregate production of either goods or services by an organization, commercial sector, or the economy as a whole.

Diminishing Returns Effect

A principle in economics where increasing one factor of production, while keeping others constant, will at some point yield lower per-unit returns.