Assume there are two people in a society. Person A is willing to pay $140 to have one unit of a public good produced and Person B is willing to pay $160 to have one unit of a public good produced and $140 to have two units produced. As a result, society would be willing to pay a price of ________ of this public good.
A. $200 for 3 units
B. $200 for 1 unit
C. $160 for 5 units
D. $300 for 1 unit
Answer: D
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Suppose an individual faces a decision of whether or not to make an investment 2 years from now. The investment will cost $10,125, and it will yield a benefit b 2 years later. a. Suppose the individual treats a dollar 1 year from now the same way as $0.90 now. How low can b be for this individual to plan to make the investment in two years?
b. Now suppose that the individual's tastes are better characterized by the beta-delta model. Suppose delta is 0.9. For what values of beta will the individual plan the same course of action 2 years from now as he would in the typical delta model (with the same delta)? c. Suppose beta is 0.9 (with delta also equal to 0.9). How low can b be in order for the individual to be willing to undertake the investment when he faces the choice in 2 years? d. For what range of values for b does the individual from (c) plan to undertake the investment but then decides not to when the time comes? What will be an ideal response?
In the Solow model, if f(k) = 8k0.5, s = 0.2, n = 0.3, and d = 0.1, what is the value of k at equilibrium?
A) 1 B) 4 C) 9 D) 16
Audit failure is the failure of an audit to uncover a ________ and the expected cost of an audit failure is the ________.
A) theft; expected cost of the theft B) mistake; cost of the mistake C) theft; cost of the theft D) mistake; expected cost of the mistake
The severe oil shortages of the 1970s in the US created:
A. cost push inflation. B. demand pull inflation. C. a recession. D. an increase in the velocity of money.