The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. To reduce the chance of theft to zero, Bob is willing to pay
A) $20.
B) $50.
C) $70.
D) $80.
C
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A price floor
A) changes the equilibrium price if it is imposed in black markets. B) changes the price and quantity if it is set below the equilibrium price. C) changes the price and quantity if it is set above the equilibrium price. D) does not create a black market if it is set above the equilibrium price. E) changes the price and quantity only if it equals the equilibrium price.
According to the text, a government policy of promoting competition must
A) assure small businesses they won't fail because of below-cost pricing or other predatory practices by larger businesses. B) assure small businesses they won't fail under any circumstances. C) equate profit margins among competing suppliers. D) maintain a process rather than some state of affairs. E) work toward making sellers' demand curves completely elastic.
Refer to Figure 5-8. Suppose the emissions reduction target is currently established at 8 million tons. What is the area that represents the cost of eliminating an additional 1 million tons?
A) A + B B) A + B + C C) B + C D) A
Which of the following is included in M1?
a. savings accounts b. money market deposit accounts c. money market mutual funds d. certificates of deposit e. None of the above are included.