Unit Manual Terms 4 Flashcards
1
Q
Public Goods
A
Goods which are non-excludable and non-rivalrous in consumption
2
Q
Rate of return on capital
A
Return on money invested in capital.
3
Q
Rate of Time Preference
A
Rate at which an individual reduces the value of future consumption (utility) relative to
the present.
4
Q
Risk-Aversion
A
Unwillingness to accept a fair-lottery where the stake equals the expected monetary value
5
Q
Risk-Neutral
A
Accepts a fair gamble and bases decisions on the expected monetary value
6
Q
Risk Preferring
A
Willingness to pay a stake higher than the expected monetary value to play a fair lottery
7
Q
State of Nature:
A
A set of uncertain outcomes
