The indifference curves of two investors are plotted against a single budget line. Indifference curve A is shown as tangent to the budget line at a point to the left of indifference curve B's tangency to the same line
A) Investors A and B are equally risk averse.
B) Investor A is more risk averse than investor B.
C) Investor A is less risk averse than investor B.
D) It is not possible to say anything about the risk aversion of the two investors, but they will hold the same portfolio.
E) It is not possible to say anything about either the risk aversion or the portfolio of the two investors.
B
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Figure 11-1
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In Figure 11-1, to reach the level of potential GDP, the administration of President Obama would most likely advocate
A. increasing Social Security payments. B. decreasing defense spending. C. decreasing personal income taxes. D. All of the above are correct.
Construct a graph of the aggregate goods and services market for an economy experiencing the following
a. a recession b. full employment c. an economic boom
Pollution rights can be traded and are always efficient.
A. True B. False C. Uncertain
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $24. How many hours should Joe stay open?
A. 3 hours B. 4 hours C. 5 hours D. 6 hours