Describe the shape of the utility function of a risk averse person
Its slope is positive but decreasing.
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Holding other things constant, decreases in the price level in the US will
a. Cause the dollar to gain value b. Cause the dollar to lose value c. Does not affect the dollar value d. None of the above
If Jason can wash a car in 20 minutes and wash a dog in 10 minutes, and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?
a. The opportunity cost of washing a car is greater for Megan. b. The opportunity cost of washing a car is one dog bath for Jason. c. Megan could wash two cars in the time it takes to wash a dog. d. Jason has both a comparative and an absolute advantage in washing a dog. e. The opportunity cost of washing a dog is greater for Jason.
What is a natural monopoly? Why is government justified in regulating a natural monopoly?
When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:
A. has an absolute advantage at producing that good. B. has a comparative advantage at producing that good. C. has no reason to trade with others. D. is efficient in production.