Suppose Vinnie is looking for a month-long vacation rental in San Diego. The first vacation rental Vinnie finds costs $800 per month. If he looks for another vacation rental, there's a 75 percent chance he'll find another one for $800 per month and a 25 percent chance he'll find one for $600 per month. Other than price, all of the vacation rentals are identical. Vinnie's marginal cost of searching for an additional vacation rental is $45. Since searching for another apartment is a ________ gamble, if Vinnie is risk-neutral, then he ________ search for another apartment.

A. better-than-fair; will not
B. fair; will not
C. fair; will
D. better-than-fair; will

Answer: D

Economics

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The marginal productivity theory of income distribution was developed by

A) William Stanley Jevons. B) George Akerlof. C) John Bates Clark. D) Edward Lazear.

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In the short run, ATC is not always higher than

a. AVC b. AFC c. MC d. Zero

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