If Ann's utility function is U = W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her risk premium to avoid bearing this risk is
A) $36.
B) $41.6.
C) $64.
D) $100.
A
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The short-run supply curve for the perfectly competitive firm is that part of the marginal cost curve that lies above the average fixed cost curve.
Answer the following statement true (T) or false (F)
When sketched as a function of disposable income, the investment demand curve is:
a. always horizontal. b. always vertical. c. upward sloping. d. parabolic.
The U.S. government sets a minimum wage, which is a:
a. price floor. b. price ceiling. c. point of equilibrium. d. recommended level.
Because government bodies have the power to impose limits on how much of a resource is consumed:
A. it will always cause deadweight loss. B. they decide what is the "right" amount for the public to consume. C. it can be efficiency enhancing in markets for common resources. D. they will often correct a market before testing the effectiveness of social norms to correct the problem.