Which of the following are scarce?
A) information
B) time for recreation
C) clean air
D) all of the above
D) all of the above
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Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand
b. A decrease in demand. c. An increase in supply. d. None of the above; there is no surplus.
Judging from the circular flow diagram, which of the following might be sold in a factor market?
a. a gourmet meal
b. the services of a medical doctor
c. automobiles
d. admission to an amusement park
Which of the following items is recorded in the financial account?
A. A Chinese businessman imports Ford automobiles from the United States. B. A U.S. tourist spends money on a trip to China. C. The New York Yankees are paid $10 million by the Chinese to play an exhibition game in Beijing, China. D. Ford Motor Company of the United States provides part of the financing for a new automobile factory in China.
Mike has the utility of wealth curve shown in the figure above. He owns a car worth $20,000, and that is his only wealth. There is a 10 percent chance that Mike will have an accident within a year. If he does have an accident, his car is worthless
a) What is Mike's expected utility? b) What is the maximum amount that Mike is willing to pay for auto insurance? c) Suppose all car owners are like Mike insofar as they have a 10 percent chance of having an accident. An insurance company agrees to pay each person who has an accident the full value of his or her car. The company's operating expenses are $1,000. What is the minimum insurance premium that the company is willing to accept? d) Will Mike buy the company's policy? Why or why not?