A risk-averse person has
a. a utility function whose slope gets flatter as wealth rises. This means they have increasing marginal utility of wealth.
b. a utility function whose slope gets flatter as wealth rises. This means they have diminishing marginal utility of wealth.
c. a utility function whose slope gets steeper as wealth rises. This means they have increasing marginal utility of wealth.
d. a utility function whose slope gets steeper as wealth rises. This means they have diminishing utility of wealth.
b
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Explain why the socially optimal output is not always the same as the market output.
What will be an ideal response?
Which of the following would be included in GDP?
a. Production of computers by IBM in Japan b. The value of a car. c. The commission on the sale of your house. d. The value of childcare provided at home by the child's mother.
Holding everything else unchanged, higher interest rates in foreign countries relative to interest rates
A) increase the demand and reduce the supply of dollars leading to an increase in the exchange rate. B) decrease the demand and the supply of dollars leading to an decrease in the exchange rate. C) increase the demand and the supply of dollars leading to an increase in the exchange rate. D) decrease the demand and increase the supply of dollars leading to a decrease in the exchange rate
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.