According to the Heckscher-Ohlin theory, comparative advantage is based on:
a. labor productivity differences.
b. product life cycles.
c. the availability of skilled resources.
d. consumer tastes and preferences.
e. the relative abundance of the factors of production.
e
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Suppose you rent an apartment and are worried about a break-in that results in theft of your property. Suppose your monthly consumption level is currently $4,000 but a break-in would result in you having to finance your purchase of replacement property -- and this would reduce your current consumption to $2,000 per month. There is a 10% chance of a break-in, and your tastes can be modeled with the expected utility form using the function 
.
a. What is the utility of the expected value of the gamble you face, and what is the expected utility of the gamble?
b. How does your answer to (a) change if the probability of a break-in increases to 20%? c. What is the certainty equivalent and the risk premium in each case? d. What equation would you have to solve to get the answer to the following: How much would you be willing to pay to keep the crime rate in your area from increasing (i.e. to keep the probability of a break in to 10% rather than have it rise to 20%) assuming there is no rental insurance available in your area? e. What would you be willing to pay to avoid the increase in the crime rate if there is a full menu of actuarily fair rental insurance available at all times? What will be an ideal response?
Suppose that Samsung, a South Korean corporation, issues bonds denominated in dollars. These are called
A) foreign exchange bonds. B) Eurobonds. C) shell bonds. D) IBFs.
The board of directors of Fast Food Inc, have the final say in all decisions made for the firm. Market conditions and recent poor performance has caused some discord among the board members. Which of the following statements is likely to be true?
a. The decisions the board members take may lead to compromises that are not in the interests of the shareholders. b. Decision-making will be decentralized in this firm. c. People lower in the hierarchy of this firm will be better equipped to take decisions. d. The board's incentives are aligned with those of the firm's principals.
Microeconomic topics do not usually include: a. the impact of large government budget deficits on private investment spending. b. the determinants of the supply of wheat by farmers
c. the determinants of the demand for DVD players by consumers. d. the impact of a change in the price of leather used to manufacture shoes.