Every Christmas, you buy yourself a lottery ticket. This year, you win the $500 million Powerball. This would most likely cause your consumption function to
A. shift downward temporarily.
B. shift upward permanently.
C. shift downward permanently.
D. shift upward temporarily.
Answer: B
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You can either invest in project A or B. Project A could have a value of $150 with a probability of 0.1 or a value of $75 with probability 0.9 . Project B could have a value of $110 with probability 0.2 or a value of $65 with a probability of 0.8 . Which project should you invest in?
a. Project A b. Project B c. Neither of the projects d. You cannot tell from the information presented
Answer the following statement true (T) or false (F)
1) If prices received by farmers decline and prices paid by farmers increase, the parity ratio will decline. 2) The Food, Conservation, and Energy Act of 2008 provides three types of agricultural subsidies: direct payments, countercyclical payments, and marketing loans. 3) The federal government has not paid subsidies to farmers since passage of the Freedom to Farm Act in 1996. 4) Environmentalists generally support price supports because these subsidies motivate additional farm production. 5) The principal beneficiaries of government agricultural aid have been the very low-income farmers.
Other things being equal, a price-discriminating firm will charge less to the customers who
A. have the most elastic demand for the product. B. are the most rational in making their decisions. C. have the least elastic demand for its product. D. have the lowest incomes.