Bill's utility function takes the form U(I) = exp(I) where I is Bill's income. Based on this utility function, we can see that Bill is:
A) risk averse
B) risk neutral
C) risk loving
D) He can exhibit two or more of these risk behaviors under this utility function.
C
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Refer to the figure above. The loss in consumer surplus due to the imposition of the tax is given by the areas ________
A) JBIE and BIA B) EAG AND GHF C) CAE AND EAHF D) JBHF AND ABH
The statement that ________ is a positive statement
A) more students should study economics B) the price of gasoline is too high C) too many people in the United States have no health care insurance D) the price of sugar in the United States is higher than the price in Australia
A good that has external costs associated with its production will be
A) produced at the optimal level. B) underproduced. C) overproduced. D) not produced.
The production possibilities for country X are either 6,000 bushels of soybeans or 10,000 bushels of wheat. The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000 bushels of wheat. Which of the following is true?
A. Country Y should specialize in the growing of soybeans according to the principle of comparative advantage B. Country X is the least cost producer of wheat C. The domestic opportunity cost of wheat production is lower in country Y D. The high cost producer of soybeans is country X