A risk-neutral individual will make investment decisions purely based on expected value because
A) she doesn't care about utility.
B) utility is a linear function of wealth.
C) she loves to take risk.
D) expected value is always more than expected utility.
B
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Which of the following is an example of an automatic stabilizer?
a. Congress legislates lower tax rates to increase consumption and investment. b. Tax rates are increased during a recession to maintain a balanced budget. c. A regressive income tax system reduces tax revenues (as a share of income) as income expands. d. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.
The elasticity of supply of product X is unitary if the price of X rises by:
A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied stays the same. D. 7 percent and quantity supplied rises by 5 percent.
Consider a monopolist who charges a single price to all of its customers. If this monopolist starts price discriminating, its output will ________ and its profit will ________.
A. rise; fall B. rise; rise C. fall; rise D. fall; fall
Thomas Malthus was an economist who contributed to the ________ theory of growth
A) neoclassical B) Keynesian C) new growth D) socialist E) classical