Describe how the risk premium for a person with a convex utility function is determined
What will be an ideal response?
A person with a convex utility function is risk preferring. This person will not pay a premium to avoid risk. The risk premium is zero.
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Job rationing occurs if
A) the Lucas wedge is positive. B) the minimum wage is set below the equilibrium wage rate. C) an efficiency wage is set below the equilibrium wage rate. D) the real wage rate is pushed above the equilibrium wage rate. E) a union wage is set below the equilibrium wage rate.
Will scarce goods necessarily be rationed in some manner?
A) Not if people agree to share them equitably B) Not if there is enough for everyone to have what they need C) Not if their prices are free to rise D) Not if they are privately owned E) Yes
Refer to Figure a. Charlie and Joe both want to ride shotgun with their mother, so they play a game of rock-paper-scissors to determine who gets to sit in the front seat. If -1 represents a loss, 1 a win and 0 a tie, and Joe's payoff is shown in the upper left-hand corner of each cell, while Charlie's appears in the lower right-hand corner, which set of rules is illustrated in the following payoff matrix?
A. Rock tears paper, paper covers scissors, scissors clip rock
B. Rock crushes scissors, scissors cuts paper, paper covers rock
C. Rock crushes scissors, scissors cuts paper, scissors clip rock
D. Rock tears paper, paper covers scissors, paper covers rock
The NAFTA treaty includes side agreements on ________________, ______________, and _________________.
Fill in the blank(s) with the appropriate word(s).