Managerial Economics
A probability-weighted average of all possible monetary outcomes of a risky decision.
What is the expected value?
This European national football team has reached the World Cup final three times but has never actually won the tournament
What is Netherlands
This animal is known as “man’s best friend.”
What is a dog?
A decision rule that averages utilities instead of monetary outcomes and allows for risk aversion.
What is expected utility?
This U.S. president appears on the $1 bill
Who is George Washington?
This animal sleeps up to 22 hours a day and lives in eucalyptus trees.
What is a koala?
A decision maker whose certainty equivalent of any lottery is smaller than its expected value.
Who is a risk-averse decision maker?
When did the unification of Italy ended?
What is 1871?
This animal, infamous in some Egyptian waters, has occasionally eaten swimmers and tourists.
What is a shark?
For a risk-averse decision maker, it is always smaller than the expected value of the lottery.
What is the certainty equivalent?
In 1932, Australia fought (and technically lost) a “war” against this animal, proving nature sometimes wins
What is the emu?
This fast bird cannot fly but can run up to 70 km/h.
What is an ostrich?
A property of a utility function that implies that the utility of the expected value of a lottery is higher than the expected utility of that lottery.
What is concavity of the utility function?
Ancient Romans used this unexpected liquid as a cleaning agent due to its ammonia content.
What is urine
This amphibian can regrow entire limbs if they are cut off.
What is a salamander?