The less responsive consumers are to a change in the price of a product, _____
a. the more price-elastic is the supply curve
b. the more income-inelastic is the demand curve
c. the more price-inelastic is the demand curve
d. the more income-elastic is the supply curve
e. the more price-elastic is the demand curve
c
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Purchasing power parity is defined as
A) an equal value of money across currencies. B) a currency whose value rises. C) an equal value of interest rates across currencies. D) a currency whose value falls. E) a constant value for a currency.
If the bidders at a first-price auction have true values of $8, $7, $6, and $5, the item will sell for
a. $8 b. $7 c. just over $8 d. just under $7
The highest price you are willing to pay for a pair of jeans is $20 . However, you are able to purchase it for $14 . This implies $6 is the producer surplus
Indicate whether the statement is true or false
An individual has an initial wealth of $35,000 and might incur a loss of $10,000 with probability p. Insurance is available that charges $gK to purchase $K of coverage
What value of g will make the insurance actuarially fair? If she is risk averse and insurance is fair, what is the optimal amount of coverage?