Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If Anna holds an auction between the two bidders, and both have high values, she would earn ___ from the auction
a. Just above $100
b. $100
c. Just above $70
d. $70
b
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Which one of the following statements about deflation is false?
a. Deflation is good for lenders. b. Deflation is bad for borrowers. c. Deflation boosts people's real incomes. d. Deflation raises the burden of carrying debt. e. During the last half of the 20th century, the U.S. economy has experienced deflation for more years than it experienced inflation.
A tariff
A) makes everyone worse off.
B) makes domestic consumers better off.
C) makes domestic producers better off.
D) makes both domestic producers and consumers better off.
An organization that brings together the factors of production is called
A. a firm. B. an industry. C. a conglomerate. D. a plant.
Which of the following evidence does NOT support the expected utility theory?
A) People assign disproportionately high weights to rare events. B) Risk-averse people do not engage in fair bets. C) Risk-loving people do not purchase insurance policies. D) Risk-neutral people engage in fair bets.