How can we measure the cost of risk?
What will be an ideal response?
The cost of risk is the amount by which expected wealth must be increased to give the same expected utility as a no-risk situation.
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An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied
A) decreases; increases B) increases; increases C) decreases; decreases D) increases; decreases E) does not change; does not change
Consider a firm whose final output (and sales) in a particular year has a value of $1,200
To produce these goods, the firm used $500 worth of intermediate goods it had purchased in previous years plus $200 worth of newly-purchased intermediate goods. In the subsequent year, this same firm again sells $1,200 worth of final goods, but in this year has purchased $700 worth of intermediate goods, of which $100 is not used in current production but, rather, added to the firm's inventory. For each of these two years, calculate the value added by this firm. For each of these two years, calculate the contribution of this firm to the economy's GDP.
Which of the following cause(s) economic growth?
a. c and d. b. d and e. c. The production of more scarce goods d. A technological improvement e. The production of more capital goods
Which of the following statements is false?
A) The market value of all nonmarket goods is omitted from GDP. B) The sale of used goods is omitted from GDP. C) The market value of a person mowing his or her own lawn is omitted from GDP. D) If a good is produced but not sold, it is included in GDP.