Ashton has the utility of wealth curve shown in the above figure. He owns a sports car worth $30,000, and that is his only wealth. Ashton is a careless driver and there is a 30 percent chance that he will have an accident within a year
If he does have an accident, his car is worthless. What is Ashton's expected utility? A) 100
B) 30
C) 70
D) zero
C
You might also like to view...
Use the following graph showing the demand and marginal revenue curves faced by a pure monopoly to answer the next question.
If the pure monopoly wants to sell quantity Q1, it should charge
A. P1. B. P2. C. 0. D. a price not labeled on the graph.
A market structure in which many firms are selling an identical product is called
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
The short-run average total cost curve eventually turns upward to form a U shape because: a. of diminishing marginal cost
b. of increasing average fixed cost. c. all factors can be varied in the long run. d. of diminishing marginal productivity.
Explain the impact on the monetary policy reaction curve and the nominal interest rate if the level of government purchases were to decrease and the central bank does not change its inflation target?
What will be an ideal response?