Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. What is Brandon's expected utility?
A. 10
B. 17.5
C. 20
D. 30
B. 17.5
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In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when
A) there is no factor substitution in production. B) the opportunity cost of production is constant. C) there are unemployed factor resources. D) a country does not engage in trade. E) transportation costs are very high.
In the federal funds market diagram, an open market sale by the Fed
A) shifts the reserve supply curve to the right. B) shifts the reserve supply curve to the left. C) decreases the federal funds rate. D) increases the volume of federal funds traded.
The merchandise trade balance is the value of a nation's:
a. merchandise and service exports plus merchandise and service imports. b. merchandise exports subtracted from capital inflows. c. merchandise imports subtracted from merchandise exports. d. merchandise imports plus net capital inflows.
Induced consumption is equal to
A. autonomous C. B. total C. C. autonomous C - total C. D. total C - autonomous C.