Bobby is offered a job as a salesperson in which there is a 50 percent chance that he will make $2,000 and a 50 percent chance that he will make $10,000. Bobby's utility of wealth curve is shown in the figure above. What is Bobby's cost of risk?
A) $1,000
B) $2,000
C) $3,000
D) $4,000
B
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If a recession in the United Kingdom causes a reduction in British imports and an economic boom in the United States causes an increase in U.S. imports, these events will most likely cause the British pound to ________ and the U.S. dollar to ________.
A. depreciate; depreciate B. appreciate; depreciate C. depreciate; appreciate D. appreciate; appreciate
Table 5-2 Number of coconuts 0 1 2 3 4 Robinson’s marginal utility C $2.00 $1.88 $1.60 $1.30 ? According to Table 5-2, Robinson’s total utility from having two coconuts is ____.
A. $1.87 B. $1.66 C. $3.88 D. not determinable from the information in the table
The automatic mechanism can best be described as:
A) the process of the economy adjusting back to potential GDP without any action taken by the government B) the result of monetary policy implemented by the Fed restoring full employment C) how fiscal policy is used to return the economy to its potential D) using rule-based policies to stabilize the economy
A government-sponsored good is often
A) produced by the government. B) subsidized. C) taxed. D) advertised.