Suppose that a large rogue wave destroys the (thankfully unoccupied) fleet of swordfish fishing boats docked in the Gloucester, Massachusetts harbor. What happens to the earnings of fishermen and women in Gloucester?
a. The reduction in the supply of fishing boats increases the marginal productivities of Gloucester fishermen and women, which causes the equilibrium wage to fall.
b. The reduction in the supply of fishing boats reduces the marginal productivities of Gloucester fishermen and women, which causes the equilibrium wage to fall.
c. The reduction in the supply of fishing boats increases the marginal productivities of Gloucester fishermen and women, which causes the equilibrium wage to rise.
d. The reduction in the supply of fishing boats reduces the marginal productivities of Gloucester fishermen and women, which causes the equilibrium wage to rise.
b
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A. both an art and a science B. superior to other policies, since it is conducted by economists. C. a science due to detailed models used D. an art as human judgments are necessary
A risk averse person will always buy insurance against risk
Indicate whether the statement is true or false
If a country's currency is determined only by the demand and supply for that country's currency, the country is said to have a
A) fixed exchange rate. B) gold standard. C) managed float. D) floating exchange rate.
A risk-averse individual has
A) an increasing marginal utility of income. B) an increasing marginal utility of risk. C) a diminishing marginal utility of income. D) a diminishing marginal utility of risk. E) a constant marginal utility of income, but a diminishing marginal utility of risk.