Consider a risk-averse individual whose initial situation is a risk-free basket of outcomes. How does this person react when he is offered a wager at favorable odds?
a. He always declines the wager.
b. He always accepts the wager.
c. He accepts the wager only if it is sufficiently small.
d. He accepts the wager only if it is sufficiently large.
c. He accepts the wager only if it is sufficiently small.
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Banks in the United States still cannot
A) own finance companies. B) be full-service brokers. C) offer their own mutual funds. D) offer merger advisory services.
_____ the externality generated by education, individuals have a _____ incentive to obtain an education for themselves
a. Because of; strong b. Despite; strong c. Because of; weak d. Despite; weak
If the price of oil rises, producers of oil will
A. increase the quantity of oil supplied. B. supply less oil. C. cut the price. D. leave the amount of oil supplied unchanged.
If there is a shortage
A. consumers will drive down the price further. B. firms will drive up the price to enhance profits. C. the price will decline to the equilibrium level. D. fewer producers want to sell the product because it is too scarce.