Refer to the data provided in Table 17.5 below to answer the following question(s). The table shows the relationship between income and utility for Lucy.
Table 17.5 IncomeTotal Utility $00$10,00010$20,00020$30,00030$40,00040Refer to Table 17.5. Lucy earns $20,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Lucy takes the bet, she will pick the Packers. She believes that the Packers have a 50-50 chance of winning the game. If the Packers win, Lucy will double her money ($40,000) but if they lose she loses her entire salary ($0). This bet can be characterized as
A. risk-neutral.
B. risk-loving.
C. a fair bet.
D. an unfair bet.
Answer: C
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If a monopolist's profits were taxed away and redistributed to its consumers,
A) inefficiency would remain because output would be lower than under competitive conditions. B) inefficiency would remain, but not because output would be lower than under competitive conditions. C) efficiency would be obtained because output would be increased to the competitive level. D) efficiency would be obtained because output would be increased and profits removed.
The sale of a used automobile would not be included in GDP of the current year because it is
A. Nonmarket transaction B. Nonproduction transaction C. Purely financial transaction D. Private transfer payment
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