At the equilibrium level of income, the value of consumption is equal to
A) (consumption - savings). B) (income - investment).
C) (savings + investment). D) (income + investment).
B
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Prospect theory implies that individuals are risk loving over losses and risk averse over gains.
Answer the following statement true (T) or false (F)
A person who practices poisonous snake charming and does not reveal this to her health insurance company before purchasing insurance is an example of
A) moral hazard. B) adverse selection. C) signaling. D) screening.
The zero sum fallacy refers to
a. You gaining only if someone else loses b. The allocation of the pieces of the total economic pie- if you eat the piece, I cannot consume it c. Ignores the possibility of the total pie growing itself d. All of the above
A booming economy can make investors:
A. wary of future downturns, and shift the supply curve for loanable funds to the left. B. eager to borrow money, and shift the demand curve for loanable funds to the right. C. eager to borrow money, and shift the supply curve for loanable funds to the right. D. wary of future downturns, and shift the demand curve for loanable funds to the left.