The certainty equivalent is less than the expected value of a gamble when tastes are risk averse.
Answer the following statement true (T) or false (F)
True
Rationale: When tastes are risk averse, an individual is indeed willing to accept less than the expected value of a gamble if it comes without risk.
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There is public dissaving if
A) G + TR > T. B) G + TR < T. C) TR < G + T. D) TR > G + T.
In the long run, if government increases spending ________
A) interest rates decrease B) it crowds out private investment C) saving increases D) all of the above E) none of the above
The most preferred solution for reducing cyclical unemployment is to: a. minimize recessions
b. provide unemployment benefits. c. provide food stamps. d. implement zoning laws.
Which of these is an example of economies of scale?
(A) A restaurant charges customers $1 a glass for water that was once provided for free. (B) A ranch increases its profits by expanding from 400 to 800 cattle without buying or renting additional land. (C) An Internet access company charges customers different rates for using the Internet at different times of day. (D) A shoe store finds it can increase profits by hiring high school students who are willing to work for minimum wage.