The above figure shows the long-run expansion path. The long-run average cost curve will be A) horizontal. B) downward sloping. C) upward sloping. D) vertical. ANSWER B
Date: September 9th, 2020
The Friedman-Savage utility function can explain why A) people buy automobile insurance. B) somebody becomes addicted to gambling. C) people become more risk averse as their wealth increases. D) people place small bets to have a chance at winning a large amount. ANSWER D
Date: September 9th, 2020
The first priority of national defense spending is the defense of economic interests abroad. a. True b. False ANSWER b
Date: September 9th, 2020
Bob invests $25 in an investment that has a 50% chance of being worth $100 and a 50% chance of being worth $0. From this information we can conclude that Bob is A) risk loving. B) risk neutral. C) risk averse. D) Any one of the three above. ANSWER D
Date: September 9th, 2020
Why is collusion more likely in a repeated game? What will be an ideal response? ANSWER First, a firm can signal other firms that it wishes to cooperate in one period, which could lead to collusion in subsequent periods. Second, a firm can punish a firm for not restricting output. The threat of punishment […]
Date: September 9th, 2020
Imputed rental income is considered taxable income to the homeowner under current tax law. a. True b. False ANSWER b
Date: September 9th, 2020
Which of the following is an example of a hidden characteristic? A) After purchasing life insurance, Billy joins the bomb squad. B) Only the owner knows about her car defects. C) Bobby let his employer know about his college degree. D) Sally provides her driving record to the car insurance company. ANSWER B
Date: September 9th, 2020
Once a government program is put into place, the employees of the bureau put in charge of administering the program _____. a. become profit maximizers b. begin working in the public interest c. start rent seeking d. become an interest group ANSWER d
Date: September 9th, 2020
If a bank offers mortgages that do not require the normal 20% down payment, the bank encourages A) people who know they might not pay off the mortgage. B) people who can’t afford the down payment but can pay off the mortgage. C) people who know that they are going to pay off the mortgage. […]
Date: September 9th, 2020
IRA stands for Individual Retirement Asset. a. True b. False ANSWER b
Date: September 9th, 2020
