In 2009, the federal government created a program called cash for clunkers whereby consumers could trade in a less efficient car for a more efficient car and receive a higher value than they would have otherwise. how would an economist understand the decision that consumers faced?

the answer is: a greater percentage chance of loss

high risk investments had the characteristic of higher percentage of great return accompanied with higher percentage chance of loss.

this type of investments usually only suitable for investors that have enough capital to survive in case one or more of their investments fail. examples of high-risk investments are stocks and currencies.