For a risk-neutral person, the expected utility associated with various levels of wealth
A) is above the person's utility function.
B) is below the person's utility function.
C) is equal to the person's utility function.
D) does not exist.
C
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Explain the economic idea that "people respond to incentives."
What will be an ideal response?
Which of the following factors can partly explain the long-term growth in production in the U.S. economy?
a. Trade surpluses and accumulation of precious metals b. A gradual but consistent increase in the price level c. Growth in population d. Improvements in technology e. Federal government budget deficits
Most cartels cease to be effective because:
A. the dominant firm buys out the other firms. B. of the incentive to cheat on the cartel agreement. C. of strict enforcement of antitrust legislation. D. consumers discover the cartel and buy from other firms instead.
What is the problem with the argument that infant industries need to be protected from foreign competition?
What will be an ideal response?