When facing a 50% chance of receiving $50 and a 50% chance of receiving $100, the individual pictured in Figure 5.2
A) would pay a risk premium of 10 utils to avoid facing the two outcomes.
B) would want to be paid a risk premium of 10 utils to give up the opportunity of facing the two outcomes.
C) would pay a risk premium of $7.50 to avoid facing the two outcomes.
D) would want to be paid a risk premium of $7.50 to avoid facing the two outcomes.
E) has a risk premium of 10 utils.
C
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The ability to produce a good using fewer resources than someone else is called
A) absolute advantage. B) comparative advantage. C) specialization. D) protectionism.
Suppose the long-run cost function is C = 2q2. What is the cost-output elasticity for this case?
A) 1 B) 2 C) 1/2 D) 4
Open market operations is a tool the Fed uses to effect the federal funds rate
Indicate whether the statement is true or false
Many business cycle theories are associated, by name, with individual economists who championed the ideas. For example, the housing cycle is also known as the
a. Schumpeter cycle b. Keynesian cycle c. Marxist cycle d. Kuznets cycle e. Jevons cycle