Author Question: Three potential rescuers witness a drowning surfer. Each is willing to rescue the surfer with ... (Read 176 times)

nramada · **on:** Jun 29, 2018

Three potential rescuers witness a drowning surfer. Each is willing to rescue the surfer with probability 0.80. What is the probability that the surfer is rescued?

What will be an ideal response?

Question 2

What are the factors that change saving and shift the supply of loanable funds curve?

What will be an ideal response?

zogaridan · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The probability that no one rescues the surfer is 0.20 0.20 0.20 = 0.008, or 8, so the probability that the surfer is rescued is 100 - 8 = 92.

Answer to Question 2

There are three main factors that change saving and shift the supply of loanable funds curve: disposable income, wealth, and the expected future income. The higher the disposable income, the more people save, so an increase in disposable income shifts the supply of loanable funds curve rightward. The higher wealth, the less people save because households feel richer and do not see the need to save. Thus an increase in wealth shifts the supply of loanable funds curve leftward. Finally, the higher the expected future income, the less people save today. Thus an increase in the expected future income shifts the supply of loanable funds curve leftward.