Expected utility functions have to be concave if they are to represent risk averse tastes.
Answer the following statement true (T) or false (F)
False
Rationale: The utility functions used to construct the expected utility function have to be concave if tastes are risk averse.
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Suppose the country of Tiny Town experienced frictional unemployment. This frictional unemployment would
A) definitely signal that the country is in a recession. B) be considered a natural occurrence in a growing economy. C) signal that there are more job leavers than job losers. D) signal that the number of discouraged workers is growing.
Explain the difference between substitutes and complements
What will be an ideal response?
Which of the following contributed to the downfall of the Soviet Union in 1991?
A) government dissatisfaction with high living standards and political freedom B) an inability to produce low-cost consumer goods that households wanted C) an overabundance of high-quality goods and services D) the lack of a strong dictator who could coordinate economic activities
In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of an increase in real GDP?
A) The demand for money curve would shift rightward to MD2. B) The demand for money curve would shift leftward to MD0. C) There would be a movement upward along the demand for money curve MD1. D) There would be a movement downward along the demand for money curve MD1.