You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table. ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50A risk-neutral manager will prefer project:
A. A.
B. B.
C. C.
D. D.
Answer: D
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The United States imposes a tariff on foreign limes. How does the tariff affect the U.S. price of a lime and the production of limes in the United States?
What will be an ideal response?
The natural unemployment rate ________
A) is the same from year to year B) is greater than the actual rate of unemployment C) is the unemployment rate when there is no cyclical unemployment D) equals zero
Which of the following is not held constant when moving along a product's demand curve? a. The price of the product itself
b. The expected price of the product in the near future. c. Income. d. Prices of complementary goods. e. Prices of substitutes.
Were the results of the U.S. tariff increase on imported small Japanese truck imports consistent with the predictions of the model of a tariff applied to a good exported by a foreign monopoly?
a. No; the imports of trucks declined from 1980 to 2000. b. Yes; the rise in market price was less than the tariff imposed, implying that Japanese producers lowered their prices to maintain market share. c. Yes; but trucks and SUVs became indistinguishable, and a number of conclusions can be drawn. d. No clear conclusions can be drawn.