Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 36 and WR = 25 and the probability of drought is 0.75. What is Brandon's expected utility?
A. 5.75
B. 33.25
C. 11
D. 30.5
A. 5.75
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Which of the following men has NOT served as Chairman of the Board of Governors?
A) Milton Friedman B) Arthur Burns C) Paul Volcker D) Alan Greenspan
If pollutants emitted by firms in the steel industry increase, but there is no increase in the costs borne by these firms, you could conclude that
a. pollution is not a serious problem in this industry. b. the consumers of steel are unwilling to bear the costs of pollution generated from steel production. c. pollution is an externality in this market, since producers and purchasers of steel do not bear the full costs of the pollution. d. pollution creates an external benefit rather than an external cost in this case.
Which of the following is not true when the economy is fully employed and government bonds are sold to finance greater government spending?
A. The government is running a cyclical deficit. B. This action results in crowding out. C. The government is running a structural deficit. D. This pushes the economy along its production possibilities curve toward more public sector goods.
In order to raise the rate of economic growth we would need to
A. increase the level of capital. B. reduce the level of labor. C. spend more on military goods. D. spend more on consumer goods.