If Ann's utility function is U = 3W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her Arrow-Pratt measure of risk aversion is
A) 0.5/w.
B) 1/w.
C) 1.5w.
D) 3/w.
A
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If the U.S. government decides to distribute surplus cheese to food banks for the homeless, the government is addressing the question of
a. which goods and services should be produced with society's scarce resources b. what production methods should be used to produce goods and services c. how will output be allocated among the individuals in the society d. what prices will be charged for goods and services e. determining the optimal degree of specialization
"John buys more of good X as his income increases, ceteris paribus," means
a. there is no cause-and-effect relationship between John's income and the quantity of good X he purchases if ceteris paribus applies b. John's demand for good X depends exclusively on income c. John's income and purchases of this good are being held constant d. the change in John's income is the only factor being considered in explaining the change in his purchase of good X e. the price of this good must have decreased in order for John to buy more of the good, regardless of changes in his income
Scarcity of resources implies that people must make decisions consistent with the means they have available to them
a. True b. False Indicate whether the statement is true or false
The revolutionary concept put forward by John Maynard Keynes was to stimulate aggregate demand through expansionary fiscal policy
Indicate whether the statement is true or false