Author Question: Even when racetrack bettors know very little about the characteristics of horses, why are their ... (Read 68 times)

Cooldude101 · **on:** Jun 30, 2018

Even when racetrack bettors know very little about the characteristics of horses, why are their aggregate bets often good estimates of the true probabilities of winning, placing, and showing?

Question 2

Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 22 units, four laborers 24 units, and five laborers 25 units. Diminishing returns set in when the firm hires:
a. the first laborer.
b. the second laborer.
c. the third laborer.
d. the fourth laborer.
e. the fifth laborer.

sarajane1989 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The odds of a horse winning a race are calculated from the actual amounts bet on it and on other horses. If bettors lay down their money on the basis of past winning records and present condition of the horses, their relative wagers correctly predict the actual probability that each horse will win a given race, and all bettors, on average, break even.

Answer to Question 2

d