Suppose option A has a higher standard deviation than option B. Which of the following statements is, in general, true?
A. A risk-averse person prefers option A to option B.
B. A risk-neutral person is indifferent between options A and B.
C. A risk-averse person prefers option B to option A.
D. Insufficient information to determine.
Answer: D
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An example of household production excluded from GDP is
A) household cleaning services provided by Merry Maids Incorporated. B) child care provided by a certified nanny. C) tree trimming you provide at your parents' home. D) plumbing work completed by Joe Fix-it. E) lawn care provided by a local lawn care company.
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange
A) if Agnes specializes in the production of X and Brenda specializes in the production of Y. B) if Agnes specializes in the production of Y and Brenda specializes in the production of X. C) only if Agnes becomes faster at producing X. D) only if Brenda becomes faster at producing X or Y.