Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000, and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless
What is Andrew's expected wealth? A) $30,000
B) $27,000
C) $20,000
D) zero
B
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Refer to the scenario above. If the size of population is same in both the countries, at the steady-state equilibrium:
A) the GDP per capita of country A will be higher than that of country B. B) the GDP per capita will be the same in both countries. C) the capital stock will be the same in both countries. D) the GDP per capita of country B will be higher than that of country A.
Backloaded compensation makes the wage profile increase at a decreasing rate
Indicate whether the statement is true or false
In "real business cycle" theory, as opposed to "traditional business cycle" theory, the govern- ment is viewed as an instrument to correct unevenness in economic growth caused by cycles
Indicate whether the statement is true or false
An implicit contract refers to: a. an understanding that the employer will try to keep wages from falling when the economy is weak or the business is having trouble, and the employee will not expect huge salary increases when the economy or the business is strong. b. an understanding that workers will produce more if they are paid more, and so the employers will often find it worthwhile to pay
their employees somewhat more than what market conditions might dictate. c. an understanding that the employer will reduce wages when business conditions are poor. d. a policy that states that those already working for firms are "insiders," while new employees, at least for a time, are "outsiders.".