Most people buy insurance because they
a. are risk lovers
b. enjoy the gamble
c. are risk neutral
d. want to avoid gambles
d
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Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:
a. increase the demand for potatoes. b. decrease the demand for potatoes. c. increase the demand for steak. d. decrease the demand for steak.
The higher the rate of inflation, the lower the:
A. real interest rate can fall. B. real interest rate can fall, as long as it is positive. C. nominal interest rate can fall. D. nominal interest rate can fall, as long as it is positive.
If the CPI in 2015 was 114.7 and the CPI in 2016 was 124.5, then the rate of inflation between 2015 and 2016 was
A. 7.9%. B. 8.5%. C. 9.8%. D. 14.7%.
The graph shown portrays a subsidy to buyers. The amount of money spent on this subsidy by the government is:
A. $2,400. B. $3,600. C. $800. D. $6,000.