Making optimal decisions "at the margin" requires
A) making decisions according to one's whims and fancies.
B) making consistently irrational decisions.
C) weighing the costs and benefits of a decision before deciding if it should be pursued.
D) making borderline decisions.
Answer: C
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If a person is entertained by gambling, then
A) she is not risk averse. B) she does not understand the concept of a fair game. C) she may gamble even if it is an unfair game. D) she will definitely not buy automobile insurance.
If the demand for a good is elastic, then total revenue
a. increases as price increases. b. remains constant as quantity demanded increases. c. increases as price decreases. d. decreases as quantity demanded increases. e. decreases as price decreases.
The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent. What is the real interest rate?
a. 5.25 percent b. 5 percent c. 2.3 percent d. 2 percent
A move from G to H represents
A. an increase in quantity demanded.
B. a decrease in quantity demanded.
C. an increase in demand.
D. a decrease in demand.