If prices in the diamond market become less volatile, all else equal, then the demand for diamonds ________ and the demand for gold ________
A) increases; decreases
B) increases; increases
C) decreases; decreases
D) decreases; increases
A
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When people are considered risk averse, they:
A. generally have a low willingness to take on risk. B. generally have a high willingness to take on risk. C. will only participate in low-risk activities. D. will never accept risk in any situation.
If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer
a. is less willing to trade away a good when he has a lot of it. b. is more willing to trade away a good when he has a lot of it. c. always tries to keep the percentage of his budget spent on each good constant. d. views one of the goods as inferior.
As a group, oligopolists would always be better off if they would act collectively
a. as if they were each seeking to maximize their own individual profits. b. in a manner that would prohibit collusive agreements. c. as a single monopolist. d. as a single perfectly competitive firm.
A firm has to decide between two projects that cost $10,000 each. Project A will provide a revenue $10,700 one year from now, while Project B will provide a revenue of $12,200 two years from now. The interest rate is 10% per year. This firm
A) chooses project A. B) chooses project B. C) rejects both projects. D) is indifferent between projects A and B.