The concept of trade-offs would become irrelevant if
A. poverty were eliminated.
B. scarcity were eliminated.
C. capital were eliminated.
D. we were dealing with a very simple, one-person economy.
Answer: B
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Nicole is indifferent between option A, which gives her $20,000 for sure, and option B, which gives her $10,000 with probability 0.5 or $32,000 with probability 0.5. Nicole's cost of risk for option B is
A) zero. B) $1,000. C) $2,000. D) $20,000.
Public saving in the economy can be increased by
A) raising taxes. B) raising government spending. C) raising transfer payments. D) lowering taxes.
According to the law of diminishing marginal utility, the marginal utility curve is ____
a. vertical b. flat. c. upward sloping. d. downward sloping.
Considering a call option, if the price of the underlying asset decreases:
A. the intrinsic value of the option decreases if it is above zero. B. the value of the option increases. C. the strike price decreases. D. the intrinsic value of the option increases if it is above zero.