A farmer with $1000 worth of crops in the field faces a .10 probability that a hail storm will destroy the value of her crop before she can harvest it. If she is risk averse, the most she would be willing to pay to insure against this loss is
a. $0.
b. $10.
c. $100.
d. $900.
c. $100.
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If the price elasticity of demand is less than 1, a monopoly's
A) total revenue increases when the firm lowers its price. B) total revenue decreases when the firm lowers its price. C) marginal revenue is undefined. D) marginal revenue is zero.
In order to increase the money supply, the banking system must have which of the following?
What will be an ideal response?
The long-run supply curve for a competitive, decreasing-cost industry is upsloping.
Answer the following statement true (T) or false (F)
Openness and change in the economic models of India and China have meant for the world economy all of the following EXCEPT
A) hundreds of millions of people have escaped poverty. B) many manufactured goods and services have become cheaper. C) forced some firms to downsize, offshore or otherwise change business practices. D) increased the market power of firms in industrialized countries as they gained most from this evolving trade.