A fair coin is flipped. If it lands heads the person receives $1.00. If it lands tails, the person receives $11.00. If the person is not willing to pay $6.00 to take this gamble, they must be
a. risk-neutral.
b. risk-averse.
c. risk-preferring.
d. either risk-neutral or risk-preferring (i.e. not risk averse)
b. risk-averse.
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000. C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
In which of the following economic activities do we commonly find a proprietor acting as a supervisor, a provider of capital, and a residual claimant?
a. A multinational bank b. An oil exploration company c. A small medical store d. An aircraft manufacturer
Specialization leads to greater production than is otherwise possible
a. only if different workers have different natural abilities b. only if production is organized within business firms c. under capitalism, but not under communism d. even if different workers have identical natural abilities e. under communal ownership, but not under capitalism
The opportunity to increase profitability is the primary reason that firms decide to export.
a. true b. false