Author Question: Option A provides 9,000 with probability 50 percent or 11,000 with probability 50 percent. Option B ... (Read 31 times)

lracut11 · **on:** Jun 29, 2018

Option A provides 9,000 with probability 50 percent or 11,000 with probability 50 percent. Option B provides 8,000 with probability 50 percent or 12,000 with probability 50 percent. For most people the cost of risk associated with B is

A) less than that associated with A.
B) the same as that associated with A.
C) exactly twice that associated with A.
D) more than twice that associated with A.

Question 2

The price in a contestable market is similar to that in a perfectly competitive market because

A) there are barriers to entry.
B) there are no barriers to entry.
C) there are many firms in the market.
D) the firm can earn an economic profit in the long run.