John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000 and there is a 10 percent chance of losing it all. John is
A) willing to pay any price for insurance.
B) willing to pay no more than $2,000 for insurance.
C) willing to pay no more than $3,000 for insurance.
D) willing to pay $5,000 for insurance.
C
You might also like to view...
In the figure above, an increase in the monetary base would create a change such as a
A) movement from point a to point b along the supply of money curve MS0. B) movement from point b to point a along the supply of money curve MS0. C) shift from the supply of money curve MS0 to the supply of money curve MS1. D) shift from the supply of money curve MS1 to the supply of money curve MS0.
The Federal Reserve econometric model estimates that the liquidity effect an increase in the money supply will
A) lower interest rates for 6 months to a year. B) lower interest rates permanently. C) have no effect on interest rates. D) raise interest rates after 6 months to a year.
Was the U.S. government able to control the world petroleum prices? Support your choice with suitable reasons
The large trade deficits in the U.S. during the 1990's were primarily associated with a rise in domestic investment spending rather than a rise in the budget deficit
a. True b. False Indicate whether the statement is true or false