Suppose a radar-activated braking system that can help prevent crashes is an option on a new car. It costs $600 and reduces the chance of dying in an auto accident by 1/700. The implicit value placed on life by a person who does not have the system installed is therefore:
A. exactly $600.
B. at least $420,000.
C. at least $432,000.
D. less than $420,000.
Answer: D
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As a result of trade, specialization in the Ricardian model tends to be
A) complete with constant costs and with increasing costs. B) complete with constant costs and incomplete with increasing costs. C) incomplete with constant costs and complete with increasing costs. D) incomplete with constant costs and incomplete with increasing costs. E) dependent on the specific opportunity costs involved in production.
Actual output can exceed the economy's potential both in the short run and the long run
a. True b. False Indicate whether the statement is true or false
The slope of the aggregate expenditure curve equals the change in
a) planned expenditure divided by the change in real GDP b) autonomous expenditure divided by the change in real GDP c) government expenditure divided by the change in real GDP d) real GDP divided by the change in planned expenditure
A diagonal straight line on a Lorenz curve represents
A) a perfectly unequal distribution of income (one person has everything). B) a perfectly equal distribution of income. C) a high level of inequality in the distribution of income. D) an oblique distribution of income.