If you are offered a gamble in which you win 500 dollars 3/8 of the time and you lose 500 dollars 5/8 of the time, what is your expected payoff and your behavior given that you are a risk-lover?
A) $500, take the gamble
B) -$125, take the gamble
C) -$125, it is unclear what you would do without further information
D) $500, decline the gamble
E) -$125, decline the gamble
C
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Refer to above figure. In the absence of trade, how many Widgets does this country produce?
What will be an ideal response?
Refer to the graph shown. If this monopolist were allowed to choose the profit-maximizing level of output, it would produce:
A. 200 units of output. B. 450 units of output. C. 125 units of output. D. 400 units of output.
Suppose the government of a small island country does not currently have any automatic stabilizers in place but they decide to implement them with the expectation of an impending recession. Which of the following would be most effective?
A. Institute a 4-year term policy for the president. B. Begin collecting property taxes. C. Create an unemployment compensation program. D. Pass legislation for a one-time investment in infrastructure.
The classical theory of the market concluded that the interest rate would equate _____ and _____.
Fill in the blank(s) with the appropriate word(s).