Refer to Table 8-5. The value of each automobile in gross domestic product equals
A) $7,000. B) $15,000. C) $18,000. D) $25,000.
D
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Rent controls unintentionally create
A) scarcity of rental units. B) surpluses of rental units. C) shortages of rental units. D) market-clearing outcomes in the apartment rental market.
Assume a portfolio in which there is equal investment in two assets that are perfectly negatively correlated, with equally expected returns of 10 percent and 6 percent for asset A and 8 percent and 4 percent for asset B
The expected yield on this portfolio is A) 8 percent. B) 7 percent. C) 6 percent. D) 5 percent.
During October and November 2008, gasoline prices were falling dramatically making travel by car less expensive but air travel prices were as high as ever
If travel by car is less expensive, and income remains the same, describe the substitution and income effects that occur for travelling by car. A) If travelling by car is a normal good, the substitution effect would cause an increase and the income effect would cause a decrease in travelling by car. B) If travelling by car is a normal good, both the substitution and income effects would be cause an increase in travelling by car. C) If travelling by car is a normal good, the substitution effect would cause a decrease and the income effect would cause an increase in travelling by car. D) If travelling by car is a normal good, both the substitution and income effects would cause a decrease in travelling by car.
For a risk-neutral person, the expected utility associated with various levels of wealth
A) is above the person's utility function. B) is below the person's utility function. C) is equal to the person's utility function. D) does not exist.