Suppose someone offers Max the following gamble: with probability 0.50 he will win $10 and with probability 0.50 he will lose $8. The expected value of this gamble is:
A. $1.
B. $2.
C. $0.
D. $5.
Answer: A
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If whenever one variable increases, another variable also increases, then these two variables are ________ related
A) inversely B) positively C) cross-sectionally D) trend-line E) negatively
You are in the business of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products
Based on the elasticities in the above table, as a profit-minded business person who seeks to avoid taxes whenever possible, which good would you least like to have taxed? A) hamburgers B) pizza C) French fries D) ice cream
In the Keynesian model of income determination, consumer expenditure includes spending by
A) consumers on personal computers. B) businesses on personal computers. C) governments on personal computers. D) foreigners on domestic personal computers.
A U.S. presidential candidate promises to redistribute income and encourage economic growth. Why might these goals be in conflict? a. The poor, on average, save more than the rich. Taxing the incomes of the rich to transfer to the poor will result in an increase in total savings. b. Taxing the incomes of the rich to transfer to the poor will result in the rich saving more
c. Taxing the incomes of the rich to transfer to the poor will provide disincentives for work and capital accumulation. d. Taxing the incomes of the rich to transfer to the poor will provide incentives for the rich to work more to make up for income lost to taxes.