Use the following statements to answer this question: I. Subjective probabilities are based on individual perceptions about the relative likelihood of an event.
II) To be useful in microeconomic analysis, all interested parties should agree on the values of the relevant subjective probabilities for a particular problem.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.

Question

Quizplus · Accepted Answer

Statement I is true as subjective probabilities are based on individual perceptions. However, statement II is false as it is not necessary for all interested parties to agree on the values of subjective probabilities for a particular problem. In fact, different parties may have different perceptions and subjective probabilities, which can be analyzed and compared to determine the best course of action. Therefore, B is the correct choice.

Use the Following Statements to Answer This Question: I