Suppose that Thom experiences a greater loss in utility if he loses $50 than he would gain in utility if he wins $50 . This implies that Thom's
a. marginal utility diminishes as wealth rises, so he must be risk averse.
b. marginal utility diminishes as wealth rises, but we can't tell from this if he is risk averse.
c. marginal utility increases as wealth rises, so he must be risk averse.
d. marginal utility increases as wealth rises, but we can't tell from this if he is risk averse.
a
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Which of the following is not true of monopolistic competition?
a. There are a large number of buyers and sellers. b. The firms produce differentiated products. c. There exists free entry and exit of firms. d. Each of the firms faces a horizontal demand curve. e. Each of the firms acts as a mini monopoly in the market.
The use of large amounts of labor relative to capital in an economy indicates: a. labor-intensive production
b. capital-intensive production. c. that wage rates will be relatively high. d. that hand-made goods are of better quality than machine-made goods.
Which of the following events will leave GDP unchanged?
a. You purchase 100 shares of Wal-Mart stock. b. You pay $500 to repair the damage done to your car by an uninsured motorist. c. You decide to work five more hours per week at your job to pay for the repairs performed on your car. d. You purchase a new car at an auction.
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower