Revenue into the general fund of the state of Texas for any biennium is highly dependent on the price of oil. At a price average of $50 per barrel, general revenue will be $95 billion. At $68 and $75 per barrel, the revenue will be $118 billion and $125 billion, respectively. If the chances are estimated at 10%, 35%, and 55% for oil prices of $50, $68, and $75 per barrel for the next biennium, respectively, the expected revenue (in $ billion) is closest to: (a) $117.38 (b) $118.02 (c) $118.92 (d) $119.50
Revenue into the general fund of the state of Texas for any biennium is highly dependent on the price of oil. At a price average of $50 per barrel, general revenue will be $95 billion. At $68 and $75 per barrel, the revenue will be $118 billion and $125 billion, respectively. If the chances are estimated at 10%, 35%, and 55% for oil prices of $50, $68, and $75 per barrel for the next biennium, respectively, the expected revenue (in $ billion) is closest to: (a) $117.38 (b) $118.02 (c) $118.92 (d) $119.50
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Revenue into the general fund of the state of
Texas for any biennium is highly dependent on
the price of oil. At a price average of $50 per barrel,
general revenue will be $95 billion. At $68
and $75 per barrel, the revenue will be $118 billion
and $125 billion, respectively. If the chances
are estimated at 10%, 35%, and 55% for oil prices
of $50, $68, and $75 per barrel for the next biennium,
respectively, the expected revenue (in $ billion)
is closest to:
(a) $117.38 (b) $118.02
(c) $118.92 (d) $119.50
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education