Suppose a person can play the lottery for $1.00. His chance of winning $25 million is 1 in 50 million. If there are no other costs or benefits involved, the logic of cost/benefit analysis says:
A. he should not play the lottery.
B. he should play only if he does not have a self-control problem with gambling.
C. he should play the lottery.
D. there is not enough information to decide whether he should play.
Answer: A
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Georgine buys more sweaters when her income increases. For Georgine, sweaters are
A) a substitute. B) a complement. C) an inferior good. D) a normal good.
These are the shares of the seven firms in Macland’s sweater industry. Sally’s Sweaters: 36%, Jack’s Sweaters: 24%, Mira’s Sweaters: 2%, Nils’ Sweaters: 8%, Hans’ Sweaters: 3%, Pedro’s Sweaters: 7%, Jules’ Sweaters 20%. What is the HH index?
a. 88 b. 7,744 c. 2,398 d. 10,000
Assume that an economy producing two products, skateboards and in?line skates, is initially in equilibrium, and that skateboards and in?line skates are substitutes. If consumer preferences shift away from skateboards and toward in?line skates, which of the following will not occur?
A. Additional capital will begin to flow into skateboard production in the long run. B. Additional capital will begin to flow into in?line skates production in the long run. C. In the short run, firms producing skateboards will incur losses. D. In the short run, firms producing in?line skates will earn a profit.
Suppose a sole proprietorship is earning total revenues of $100,000 and is incurring explicit costs of $75,000. If the owner could work for another company for $30,000 a year, we would conclude that:
A) the firm is incurring an economic loss. B) implicit costs are $25,000. C) the total economic costs are $100,000. D) the individual is earning an economic profit of $25,000.