A Decision Maker Who Uses the Maximin Criterion When Solving

question 62

Multiple Choice

A decision maker who uses the maximin criterion when solving a problem under conditions of uncertainty is:

• A)an optimist.
• B)a pessimist.
• C)an economist.
• D)an optometrist.
• E)making a serious mistake;maximin is not appropriate for conditions of uncertainty.

Understand the conditions under which countries stand to gain or lose from trade.

Assess the role of exchange rates in determining trade flows between countries.

Understand the principles of opportunity cost in the context of production possibilities.

Understand the role of the hypothalamus in regulating temperature and eating behavior.

---

Definitions:

Marginal Productivity Theory

An economic theory suggesting that the payment to each factor of production equals the added productivity that one additional unit of the factor brings to the product.

Income Distribution

How the total earnings are distributed among people or families within an economic system.

MRP Curve

The Marginal Revenue Product curve, showing how the additional revenue from selling one more unit of a product changes with the quantity of the product sold.

Labor Demand Curve

A graphical representation of the quantity of labor employers are willing to hire at each possible wage rate, holding all other factors constant.