How should a financial plan of an older saver differ from that of a younger saver?
What will be an ideal response?
The older saver has a shorter time horizon. The financial goal should be to conserve existing funds to earn a rate slightly above inflation. The portfolio plan should be to reduce risk by selecting safe assets to earn an expected return after inflation of about zero.
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As the price of cell phones fell during the last decade, consumers' total expenditures on cell phones increased. If the demand curve for cell phones did not shift, this fact means that the demand for cell phones
A) must have shifted leftward. B) must be upward sloping. C) is elastic. D) is inelastic.
Suppose a social activist collecting information on the level of air pollutants in sparsely populated regions concludes that pollution levels are positively related to population. Since her sample set is restricted only to sparsely populated regions her outcome would be erroneous due to:
a. recognition heuristic. b. availability heuristic. c. representative heuristic. d. selection bias.
According to Milton Friedman, regular income can be divided into permanent income and transitory income
Indicate whether the statement is true or false
Refer to the data provided in Table 10.1 below to answer the following question(s).
Table 10.1 
Refer to Table 10.1. The marginal revenue product of the fourth worker is
A. $5. B. $20. C. $100. D. $475.