Mel is thinking of going on a cruise. Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50. The probability of nice weather is 60 percent and the probability of bad weather is 40 percent. Trip insurance is sometimes available. If purchased, it allows travelers to delay the cruise until the weather is nice. The amount of money that Mel is willing to pay for trip insurance will be:
A. the same regardless of whether she is risk-averse or risk-neutral.
B. positive if she is risk-neutral and negative if she is risk-averse.
C. lower if she is risk-averse instead of risk-neutral.
D. higher if she is risk-averse instead of risk-neutral.
Answer: A
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The unemployment rate is interpreted as the percentage of the
A. able-bodied population who are not working. B. labor force that are not employed. C. workforce that have been laid off. D. adult population who are unemployed.
Refer to Table 2-4. Which of the following statements is true?
A) George has an absolute advantage in both tasks. B) Jack has an absolute advantage in both tasks. C) Jack has an absolute advantage in lawn mowing and George in garden cultivating. D) Jack has an absolute advantage in garden cultivating and George in lawn mowing.
A simultaneous game is said to exist when:
A. firms are playing pricing games in different markets at the same time. B. firms choose their strategies at the same time as their rivals. C. firms can set multiple prices for the same good at the same time. D. strategies are set without regard to possible interactions in future time periods.
Sierra likes chocolate-covered deviled eggs. After eating 10 chocolate-covered deviled eggs, she switches to strawberry ice cream covered in sauerkraut. We can conclude that
A. the chocolate-covered deviled eggs now have a negative marginal utility. B. Sierra is minimizing her utility. C. the chocolate-covered deviled eggs made Sierra sick. D. at this point, the chocolate-covered deviled eggs have a lower marginal utility per dollar spent than that of strawberry ice cream covered in sauerkraut.