From a firm's point of view, when the demand for a good has a price elasticity of 0.5, then, all things remaining the same, a(n):
A) increase in the price of the good will decrease the firm's revenue.
B) increase in the price of the good will increase the firm's revenue.
C) change in the price of the good will not affect the firm's revenue.
D) change in the price of the good will not affect the quantity of the good demanded by consumers.
B
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Jeff holds $50,000 wealth which has a utility of 7.07 utils (assuming utility is the square root of wealth in thousand dollars). He considers investing this in a gamble which has a 0.6 probability of increasing his total wealth to $100,000 and 0.4 probability of decreasing it to $30,000 . What will be Jeff's expected utility from the gamble?
a. 15 utils b. 8.19 utils c. 3.2 utils d. 12.12 utils
If the interest rate at which you can lend funds is r percent per year, then the present value of Y dollars to be received next year is
a. (1 + r)Y b. Y / r c. Y d. Y - r e. Y / (1 + r)
If C = $4,000 + 0.8(Y) and the expected equilibrium level of national income is $40,000 . then the intended investment will be
a. 1,000 b. 36,000 c. –1,000 d. 44,000 e. not enough information provided
Unanticipated inflation benefits debtors at the expense of creditors.
Answer the following statement true (T) or false (F)