Rhonda's utility of wealth is 65 units at $5,000, 80 units at $7,000, and 95 units at $10,000. Starting from zero wealth, she must choose between options A and B
Option A gives her $7,000 for sure. Option B gives her $5,000 with probability 0.6 or $10,000 with probability 0.4. Rhonda
A) will choose A.
B) will choose B.
C) is indifferent between A and B.
D) needs more information to make a choice.
A
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Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is
A) Brand B plus Brand C. B) twenty dollars. C) Brand A. D) Brand B or Brand C, depending on which is considered the highest-value alternative forgone.
Suppose the exchange rate for the U.S. dollar rises. This could be caused by
A) an increase in U.S. import demand. B) a decrease in the world demand for U.S. exports. C) a fall in the expected future exchange rate. D) an increase in the U.S. interest rate differential.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. e. The GDP Price Index and reserve-related (central bank) transactions remain the same.
Refer to Figure 21.3. The best estimate of where diminishing marginal returns begin is at an output level of
A. 10. B. 40. C. 20. D. 30.