The utility function with respect to wealth is negatively sloped for a risk averse person
Indicate whether the statement is true or false
F
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The price effect refers to how changes in
A) price affect real income. B) price affect the quantity of a good consumed. C) income affect prices. D) preference affect prices.
Consumer spending ________ and investment spending ________
A) follows a smooth trend; is the most stable component of aggregate expenditure B) is very volatile and subject to fluctuations; follows a smooth trend C) follows a smooth trend; is more volatile and subject to fluctuations D) is very erratic; is also erratic, but less erratic than consumer spending
If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is
a. horizontal. b. vertical. c. backward sloping. d. upward sloping.
In the Wealth of Nations, Adam Smith argues that:
A. self-interest leads to the efficient allocation of resources. B. profits are maximized where marginal revenue equals net marginal benefits. C. benevolence leads to the efficient allocation of resources. D. None of the statements associated with this question are correct.