Imagine That 86,999 People Who Are Penniless Live in Centerville

question 4

Multiple Choice

Imagine that 86,999 people who are penniless live in Centerville.Bill Gates,whose net worth is $87,000,000,000 moves to Centerville.Now the mean net worth in this town is _____ and the median net worth is _____.

• A)0; 0
• B)0; $1,000,000
• C)$1,000,000; 0
• D)$1,000,000; $1,000,000

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Definitions:

Risk-averse

A description of an investor or decision-maker who prioritizes minimizing risk over achieving potentially higher gains.

Certain Payoff

A guaranteed outcome or return from an investment, where the investor has absolute certainty over the amount to be received.

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to another.

Market Failures

Situations in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.