Dahlia can earn $60,000 a year working at a relatively safe job, or $65,000 a year working at a riskier job
The probability of death from working at the relatively safe job is 1/5,000, and the probability of death from working at the riskier job is 1/1,000. Using the compensating differential approach and the above information, what is the value of Dahlia's life? A) $2 million
B) $2.5 million
C) $6.25 million
D) $25 million
C
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Consider two banks: Bank A and Bank B. Bank A has total assets worth $50,000 and total liabilities worth $24,000. Conversely, Bank B has total assets worth $100,000 and total liabilities worth $90,000
Given this information, which of the two banks is more prone to bank runs and why?
A firm that successfully differentiates its product or lowers its average cost of production creates
A) a perfectly inelastic demand curve for its product. B) value for its customers. C) entry barriers into its market. D) economies of scale.
The theory of purchasing-power parity primarily explains
a. why trade deficits tend to move to zero over time. b. how foreign prices affect domestic prices. c. the determination of the real exchange rate. d. why a change in the real exchange rate changes a country's net exports.
Consider the following innovation game: Firm A must decide whether or not to introduce a new product. Firm B must decide whether or not to clone firm A's product. If firm A introduces and B clones, then firm A earns $1 and B earns $10. If A introduces and B does not clone, then A earns $10 and B earns $2. If firm A does not introduce, both firms earn profits of 0. How many Nash equilibria are there for this game?
A. 2 B. 0, but there are secure strategies. C. 1 D. 0