Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . If Samantha is offered an insurance policy for her house to protect her from loss at $3,000, would she buy the insurance?
a. Yes because she gets to now enjoy her wealth risk-free
b. No, because she can take the risk and be better off
c. Yes, because she is a risk lover
d. None of the above
a
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
A demand curve that is horizontal indicates that the commodity
A) has few substitutes. B) must be very cheap. C) has a large number of substitutes. D) is a necessity.
As long as marginal cost is below average cost, average cost will be:
a. falling. b. rising. c. constant. d. changing in a direction that cannot be determined without more information.
Which of the following is a drawback of command-and-control regulation?
a. Applying the same standard to all firms b. Being enforced by industry executives c. Providing too much flexibility d. Relying too heavily on market tools