The law of large numbers:
A) can be used to explain why some people are risk averse and others are risk neutral or risk loving.
B) can be used to explain why some people choose to self-insure against random, single and largely unpredictable events.
C) states that large amounts of information are often preferred to small amounts of information.
D) states that the average outcome of a large number of similar events can often be predicted.
D
You might also like to view...
Refer to Scenario 13.1. If your negotiated price had been $350 instead of $250, the sum of consumer surplus and producer surplus would be:
A) less than what would have accrued at the $250 price. B) the same as what would have accrued at the $250 price. C) more than what would have accrued at the $250 price. D) None of the above is necessarily correct.
On the graph for a monopolist’s losses, the total loss is shown by ______.
a. area DAQM0
b. curve ATC
c. curve AVC
d. area CBAD