Refer to the scenario above. Which investment option will a risk-neutral individual choose?
A) He will choose to invest in Option A.
B) He will choose to invest in Option B.
C) He will choose to invest in Option C.
D) He will be indifferent in investing in any of the three options.
D
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Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will
A) decrease. B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. C) stay the same. D) increase. E) definitely either stay the same or decrease.
For some fisheries in the U.S., the state or federal government imposes "gear restrictions" that limit the size of boats, nets, or other equipment that may be used to harvest the fish in a given body of water
The purpose of the gear restrictions is to: A) prevent everyone from using the common property resource (fish). B) make it harder for other members of society to harvest the resource. This reduces the opportunity cost of the resource for other members of society, and the marginal social cost is closer to the private cost. C) increase the private cost of using the resource so that the private cost is closer to the marginal social cost. D) maintain traditional ways of harvesting fish, which is valuable for promoting tourism.
Suppose the Fed sells a $50,000 U.S. Treasury security to Martha, a member of the public. If Martha writes a check to the Fed in order to buy this security, the money in her checking account will be transferred to
A) the Fed, and now the Fed will have $50,000 more in reserves than it had before. B) her bank, and now her bank will have $50,000 more in reserves than it had before. C) the Fed, and now it is as if the money doesn't exist. D) the Treasury, and now the Treasury will have $50,000 more in reserves than it had before.
The diamond-water paradox was solved by knowing that
A. the price of water and diamonds is determined by total utility received, not marginal utility. B. the price of water and diamonds is determined by marginal utility, not total utility. C. the total utility of water is greater than the total utility of diamonds. D. the marginal utility of water is greater than the marginal utility of diamonds.