You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50The expected value of project C is:
A. $10.
B. $20.
C. $5.
D. None of the answers are correct.
Answer: D
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If the statistical discrepancy is zero, in order to calculate GDP from the value of net domestic product at factor cost, we must add
A) the value of intermediate goods and subtract the value of imports. B) direct taxes, subtract corporate profit, and add investment. C) indirect taxes, subtract subsidies, and add depreciation. D) subsidies, subtract indirect taxes and depreciation. E) indirect taxes, subsidies, and depreciation.
If a consumer has a choice between only two goods and both of them are perfect complements what would the indifference curve look like and why?
What will be an ideal response?
If a country is producing at point where an increase in the production of one good requires a reduction in the production of another good, then it must be producing at an:
A. efficient point. B. undesirable point. C. unattainable point. D. inefficient point.
Suppose you know that at the current level of production average total cost equals marginal cost, then you know that it is also true that:
A. fixed costs are zero. B. average fixed costs are increasing. C. average total cost will decrease if production is increased. D. average total cost is minimized at the current level of output.