Given that Tamar is a risk-averse person, she might accept a bet with a 50 percent chance of losing $100 today if she had a 50 percent
a. chance of winning $120 in two years and the interest rate was 11%.
b. chance of winning $114 in two years and the interest rate was 7%.
c. chance of winning $110 in two years and the interest rate was 3%.
d. None of the above are correct; a risk averse person would not accept any of the above bets.
c
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In the United States and other high-income countries, capital's share and labor's share of total income have been about ________, respectively
A) 1/2 and 1/2 B) 4/5 and 1/5 C) 1/3 and 2/3 D) 3/4 and 1/4
Which of the following is a property of a typical indifference curve?
a. upward sloping b. bowed away from the origin c. does not intersect another indifference curve d. a lower one is preferred to a higher one
A Blue Ribbon Committee has decided that acid rain should be reduced and is trying to determine the optimal level of reduction. There are benefits from reducing acid rain (more wildlife and forests, better health, etc.), but there are also costs. The committee estimates that the marginal benefit of each unit of reduction is $1,400 - 5R, where R is units of reduction, and the marginal cost is 2R. If the committee wants to maximize the net benefit from reducing acid rain, what is marginal cost at the optimal level of reduction?
A. $200 B. $ 10 C. $ 20 D. $100
Long-run average cost is never greater than short-run average cost because in the long run,
A) capital costs equal zero. B) the firm can move to the lowest possible isocost curve. C) wages always increase over time. D) wages always decrease over time.