Suppose Vinnie is looking for a month-long vacation rental in San Diego. The first vacation rental Vinnie finds costs $800 per month. If he looks for another vacation rental, there's a 75 percent chance he'll find another one for $800 per month and a 25 percent chance he'll find one for $600 per month. Other than price, all of the vacation rentals are identical. Vinnie's marginal cost of searching for an additional vacation rental is $45. Since searching for another apartment is a ________ gamble, if Vinnie is risk-neutral, then he ________ search for another apartment.
A. better-than-fair; will not
B. fair; will not
C. fair; will
D. better-than-fair; will
Answer: D
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Switzerland provides a counterexample to the claim
A) nations are poor because they are subject to exploitation by nations with superior military power. B) the rule of law is necessary for economic growth. C) military power is the source of the wealth of a nation. D) central economic planning doesn't work.
Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?
a. A high rate of inflation exists. b. A fixed exchange-rate system exists. c. Purchasing power parity exists. d. The foreign exchange market is in equilibrium. e. Arbitrage opportunities exist.
Corruption is only present in developing nations
Indicate whether the statement is true or false
Hyperinflation refers to inflation in excess of ________ per month
A) 30% B) 10% C) 20% D) 25%