Suppose Chris is offered the following gamble: with probability 0.1 he will win $90, with probability 0.4 he will win $50, and with probability 0.5 he will lose $60. Chris will:
A. accept this gamble if he is either risk neutral or risk-averse.
B. accept this gamble if he is risk-averse, but not if he is risk-neutral.
C. not accept this gamble if he is risk-neutral.
D. accept this gamble if he is risk neutral, but not if he is risk-averse.
Answer: C
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The trends displayed in the table can best be explained by
A) service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates. B) the inflation rate has been rising over the time period. C) the real wage rate has increased at a rate about equal to the inflation rate. D) the nominal wage rate has increased at a rate about equal to the inflation rate. E) None of the above can explain the trends in the figure.
Income is the only factor used to measure a person's wealth.
A. True B. False C. Uncertain
According to the table shown, what happened to the cost of living from 2013 to 2014? The cost of living:
A. increased; consumers became worse off than they would have been if the price level had not changed.
B. decreased; consumers became worse off than they would have been if the price level had not changed.
C. increased; consumers became better off than they would have been if the price level had not changed.
D. decreased; consumers became better off than they would have been if the price level had not changed.
Suppose a graph is drawn to show a consumer's preferences for football tickets and basketball tickets. The quantity of football tickets is measured on the horizontal axis. If the price-consumption curve is horizontal when the price of football tickets changes, then
A) football tickets are an inferior good. B) the demand for football tickets is perfectly elastic. C) the demand for football tickets is unit elastic. D) the demand curve for football tickets will be horizontal.