In Figure 6.7 with a quantity constraint of Q1, the dead weight loss is area:
A. A.
B. H + I + J.
C. C + F.
D. G.
Answer: C
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Life insurance companies have increased their purchases of corporate stock in recent years in an effort to
A) reduce risk. B) increase asset returns. C) increase liquidity. D) reduce taxes.
If two goods are often consumed together, they are
a. substitute goods b. inferior goods c. complementary goods d. normal goods e. unrelated goods
Three established firms—Cobb, Urban, and Sing—are in business in the United States. Which of the following events suggests that an oligopoly exists in their industry?
a. Two new competitors enter the industry after Urban raises its output. b. Cobb and Urban suffer a sales loss after Sing lowers its prices. c. Cobb make its business plan without paying attention to Urban or Sing. d. Sing suffers a sales loss after Cobb raises its prices.
Taking actions that reduce risk
A) raise your expected value. B) makes you less risk-averse. C) are impractical in most circumstances. D) change your utility function.