Catherine is risk averse. When faced with a choice between a gamble and a certain level of wealth, she will
A) always prefer the gamble.
B) always prefer the certain level of wealth.
C) prefer the gamble if the expected utility from it is higher than the utility from the certain level of wealth.
D) prefer the certain level of wealth if the expected utility from the gamble is higher than the utility of the certain level of wealth.
C
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Deposit insurance indirectly helped to create the savings and loan crisis in the United States because
A) depositors were not concerned with the types of investments made because they were insured, while at the same time savings and loans were aggressively investing in risky projects. B) depositors, believing that the government would not secure their deposits, were very concerned with the types of investments made at savings and loans. C) the government, without warning, eliminated deposit insurance for savings and loans, thereby causing a run on these institutions. D) depositors were not concerned with the types of investment made because savings and loans were making very conservative investments.
According to your textbook, changes in supply and demand reflect changes in
A) society's overall welfare. B) the plans that buyers and sellers are making. C) the overall efficiency of the market. D) government policy. E) None of the above.
When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?
A. the law of scarcity B. the law of supply C. the law of increasing additional costs D. the law of demand
Present value is
A) the value of a future amount expressed in today's dollars. B) the value of a dollar received a year from now, expressed in terms of its future value. C) the inverse of the interest rate. D) the nominal value instead of the real value of something.