Suppose the probability of a near-new car being good is 0.4 while its probability of being a lemon is 0.6 . If risk-neutral consumers are willing to pay $14,000 if the car is in good condition and $8,000 if it is a lemon, a risk averse buyer who knows those probabilities would be willing to pay $10,400 for the car
Indicate whether the statement is true or false
F
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Evidence exists that countries with the most open economies tend to have more stringent environmental regulations
a. True b. False Indicate whether the statement is true or false
Elasticity is a measure of
a. the slope of a linear demand curve b. the slope of a supply curve c. relative responsiveness d. economic welfare e. consumer tastes
Economic aggregates are not observable in the "real world."
a. True b. False Indicate whether the statement is true or false
Kimani sells life insurance and is considering buying a $50,000 Cadillac for business purposes (thus, the expense reduces her taxable income). If Kimani is in the 40 percent marginal tax bracket, how much after-tax income will she have to give up in order to enjoy the Cadillac?
a. $20,000 b. $30,000 c. $25,000 d. $70,000