You study horse racing avidly and discover for this year's Kentucky Derby you think you have the field pretty well figured out. In fact, you calculate the expected return and it is the same as the expected return you are getting from the stock market. Is this investment in the race valuable to you?
What will be an ideal response?
While the opportunity to win at the horse race is present, so is the opportunity to lose your investment. The same situation exists with the stock market. One key difference, however, is the stock market offers the opportunity to diversify risk through spreading, this opportunity does not exist with a single horse race, it will be all or nothing.
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Above-equilibrium wages caused by efficiency wages will most likely result in
a. a shortage of labor. b. increased unemployment. c. compensating wage differentials. d. an decrease in the quantity of labor supplied.
John Amaker owns orange groves and hires pickers for a two-week period as shown in Table 7-3.Table 7-3 Pickers Oranges Picked 1 1,000 2 2,000 3 3,000 4 3,900 5 4,700 6 5,400 7 6,000 8 6,200 9 6,000 In Table 7-3, the marginal physical product of the fifth picker is
A. 4,700. B. 900. C. 800. D. 3,900.