The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Living with this risk gives Bob the same expected utility as if there was no chance of theft and his wealth was
A) $0.
B) $20.
C) $30.
D) $50.
C
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Usually, price elasticities of supply are
A) positive, because higher prices yield larger quantities supplied. B) considered short-run adjustments due to supply constraints. C) ordinarily a negative number based on the law of supply. D) an inverse relationship between price and quantity supplied.
If people expect inflation to occur, they will make more consumption purchases today
Indicate whether the statement is true or false
Which of the following is an example of a firm's derived demand?
a. The wage that a worker earns is a function of her human capital. b. A firm's demand for college textbook study guide authors is inseparably linked to the supply of college textbooks. c. Factors that increase the demand for labor will increase the equilibrium wage. d. All of the above are correct.
Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 6 pounds of apples or 1 pound of oranges. Ava can pick 8 pounds of apples or 1 pound of oranges. It can be concluded that
A. Ethan has a comparative advantage in picking apples. B. Ava has an absolute advantage in picking oranges. C. Ethan has an absolute advantage in picking apples. D. Ava has a comparative advantage in picking apples.