Suppose that individuals with state-independent and risk-averse tastes insure each other through state-contingent trades. The competitive equilibrium price will then result in actuarily fair insurance terms.
Answer the following statement true (T) or false (F)
False
Rationale: This is true only if there is no aggregate risk.
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Which of the following statements about a supply curve is FALSE?
A) It shows a direct (positive) relationship between price and quantity supplied. B) It shows the quantity supplied at each specific price. C) It typically slopes downward to the right. D) It has a positive slope.
The substitution effect of a decrease in the wage rate causes the quantity of labor supplied to
a. increase b. increase only if the individual desires more leisure time c. increase only if the substitution effect outweighs the income effect d. decrease e. decrease only if the individual lowers the value of leisure time
If people's incomes decrease, their demand for other currencies shifts to the right
a. True b. False Indicate whether the statement is true or false
Refer to the graph shown. Which supply curve is perfectly inelastic?
A. A B. B C. C D. D