Refer to Table 2-17. What is Lucy's opportunity cost of making a wagon?
A) 3 wagons B) 3/4 of a wagon C) 1 1/3 tricycles D) 2 tricycles
C
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Farmers who purchase insurance against crop failures tend to be pooled with farmers far away. Why might this be the case?
A) The weather in a single geographic area represents idiosyncratic risk, which is diversifiable. B) The weather in a single geographic area represents systematic risk, which is not diversifiable. C) The weather in far-flung geographic areas represents systematic risk, which is not diversifiable. D) The weather in far-flung geographic areas are commonly positively correlated.
Generally, investors expect that projects with high expected net present values also will be projects with
a. low risk b. high risk c. certain cash flows d. short lives e. none of the above
Decreasing the required reserve ratio is an expansionary policy because it increases the amount of excess reserves in the banking system
a. True b. False Indicate whether the statement is true or false
Figure 34-6
?
From Figure 34-6, one can infer that
A. Honduras will be willing to trade bananas for corn at a unit ratio of no less than 2 corn:1 banana. B. Honduras will be willing to trade bananas as long as the unit exchange ratio is greater than 1/2 corn:1 banana. C. Honduras has no potential to gain from trade. D. Honduras will be unwilling to trade at an exchange ratio.