Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. What is the expected revenue from setting the price at $100?
a. $70
b. $75
c. $80
d. $100
b
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If a financial institution extends a 25 year loan at a 6 percent interest rate, and then the inflation rate increases suddenly and unexpectedly to 6 percent per year, the institution receives on its loan a real return of
A) minus 12 percent. B) zero percent. C) 6 percent. D) 12 percent. E) 36 percent.
What happened to the average person’s standard of living when Great Britain and the United States experienced free trade, low tax rates, low levels of government regulations, and strong protection of private property?
a. The average person’s standard of living did not change. b. The average person’s standard of living increased substantially. c. The average person’s standard of living decreased substantially. d. The average person’s standard of living was not affected by these conditions.
Suppose the current exchange rate is $1.60 per pound. A sweater purchased by an American in London costing 50 pounds would cost
a. $31.25 b. $80.00 c. $51.60 d. $48.40 e. $100.00
If Canada goes from a large budget deficit to a small budget deficit, it will
a. increase private saving and so shift the supply of loanable funds right. b. increase investment and so shift the demand for loanable funds right. c. increase public saving and so shift the supply of loanable funds right. d. reduce national saving and shift the supply left.