Curly is offered the following gamble: a 25 percent chance of winning $1,500 and a 75 percent chance of losing $500. This is a(n):
A. fair gamble.
B. unfair gamble.
C. better-than-fair gamble.
D. almost-fair gamble.
Answer: A
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The price of a goods falls and you discover that you can eat more of the goods because they are cheaper than other goods
a. surplus efficiency. b. latent efficiency. c. demand efficiency. d. production efficiency. e. none of the above
The burden of a tax will fall primarily on buyers when the
a. demand for the product is highly inelastic and the supply is relatively elastic. b. demand for the product is highly elastic and the supply is relatively inelastic. c. tax is legally (statutorily) imposed on the seller of the product. d. tax is legally (statutorily) imposed on the buyer of the product.
The theory of the kinked demand curve is that
A. although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm’s behavior. B. freedom of entry will reduce profits to zero. C. a firm’s competitors will follow it in a price decrease but not follow it in a price increase. D. firms are all seeking the position of joint profit maximization.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.