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You are thinking of buying a new computer Before purchasing a particular model you have decided to gather some information about all the computer models

You are thinking of buying a new computer. Before purchasing a particular model, you have decided to gather some information about all the computer models available to you. The amount of information you collect should only be dependent on:  

A. the cost of the information

B. how much you want the computer

C. how much information you are able to find

D. the cost of the information and on how much you want the computer

32.For a large group of individuals, the proportion of people who will have accidents is:  

A. extremely predictable.

B. extremely unpredictable

C. always constant

D. extremely unstable

33.When a trading opportunity is presented to a heterogeneous group of potential traders, those who accept it will be often:  

A. worse, on average, than those who do not accept it.

B. better, on average, than those who do not accept it.

C. no different than those who do not.

D. smarter, on average, than those who do not accept it than those who do not.

34.Consider John, who purchases an insurance policy on an expensive tennis racket that he has acquired. He then proceeds to hit his racket against the wall every time he losses a point. This is an example of:  

A. an adverse selection problem

B. a moral hazard problem

C. signalling

D. co-insurance

35.Your utility function for money is U = (money)2. Are you a risk taker?  

36.You own a €100 bike. If you park it outside at school there is a 25% chance that it will be stolen. What is the expected value of your bike in the scenario described in the question above?  

Feb 11 2020 View more View Less

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