Which of the following is correct concerning a risk-averse person?
a. She would not play games where the probability of winning and losing a dollar are the same.
b. She might not buy health insurance if she thinks her risks are low.
c. Her marginal utility of wealth decreases as her income increases.
d. All of the above are correct.
d
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The slope of an indifference curve represents the maximum amount of one commodity that a consumer is willing to give up in exchange for one more unit of another commodity.
Answer the following statement true (T) or false (F)
Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $30,000 and Family B has income of $80,000 What is the marginal and average tax rate for each family?
A) Family A: marginal—10 percent; average—6.7 percent; Family B: marginal—30 percent; average—15 percent. B) Family A: marginal—10 percent; average—20 percent; Family B: marginal—30 percent; average—23 percent. C) Family A: marginal—10 percent; average—10 percent; Family B: marginal—40 percent; average—40 percent. D) Family A: marginal—10 percent; average—15 percent; Family B: marginal—40 percent; average—20 percent.
Tacit collusion among firms does not involve explicit agreements on pricing and output levels
a. True b. False
Mutually beneficial trade is impossible when different persons have different preferences about goods and services
a. True b. False Indicate whether the statement is true or false