Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is U = 100(M). Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. What is the maximum you will pay the campus security for the safekeeping service now?
What will be an ideal response?
Since you are indifferent between sure value and expected value you will pay up to $25 to guarantee the $75 expected value.
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The United States balance of payments accounts
a. records all earnings from the foreign activities of U.S. residents. b. records all expenditures of U.S. citizens' abroad. c. records all earnings from the foreign activities of foreign governments. d. Both a and b e. All of the above
Answer the following statement(s) true (T) or false (F)
1. The Maximum Contaminant Level (MCL) is to be set as close to the Maximum Contaminant Level Goal (MCLG) as possible. 2. An established reference dose (RfD) is defined as the amount of a contaminant to which people can be exposed over a 24-hour period without harm. 3. U.S. primary drinking water regulations are performance-based standards. 4. Secondary maximum contaminant levels (SMCLs) are enforceable drinking water standards that are set to protect public welfare. 5. A drinking water standard based on benefit-cost analysis would be set at the point where the TSB is maximized.
According to the equation of exchange, if Real GDP is $3 trillion and the money supply is $0.5 trillion, then velocity
A) must be 6. B) must be 1/6. C) must be 4 trillion. D) must be 1/4 trillion. E) cannot be determined without knowing what the price level is.
Give an example of a firm that decides to shut down because it cannot cover variable costs. Use hypothetical numbers and avoid using any examples provided in the text.
What will be an ideal response?