If Ann's utility function is U = W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her expected wealth is
A) $1280.
B) $2880.
C) $4160.
D) $5840.
C
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The federal government pays airlines to service small cities in the United States through a subsidy program called Essential Air Service which was established in 1978 when the airline industry was deregulated
Most subsidies can't exceed $200 per passenger. Without this subsidy, what is TRUE? A) There would be higher prices and fewer flights. B) There would be lower prices and fewer flights. C) There would be an increase in supply. D) There would be a decrease in demand.
Which of the following statements applies to the classical system?
a. There is money wage inflexibility since full employment already existed b. A perfectly flexible money wage is not always a requirement for full employment c. Full employment was easily explained with downward money wage rigidity d. An imperfect market structure is requirement for full employment e. none of the above
A person practices poisonous snake charming and does not reveal this to her health insurance company before purchasing insurance. This is an example of
A) moral hazard. B) adverse selection. C) signaling. D) screening.
Which of the following is the best example of a product or service that provides a benefit externality?
A) the construction of a private road that allows vehicles if a toll is paid B) a public library C) a bookstore that is open to everyone D) All of the above E) None of the above