Hold Jared's preferences for pizza and Pepsi constant. Suppose Jared's income, as well as the prices of pizza and Pepsi, double. As a result,
a. both Jared's indifference curves and his budget constraint change.
b. Jared's indifference curves change, but his budget constraint does not change.
c. Jared's budget constraint changes, but his indifference curves do not change.
d. neither Jared's indifference curves nor his budget constraint change.
d
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Patents stimulate technological advance by
A) allowing inventors to capture the economic rewards of their inventions. B) making capital more productive. C) providing information about the status of technical knowledge in the economy. D) enabling the government to determine which potential technological advances firms should pursue.
The above figure shows Bob's utility function. He currently has $50 and is considering investing all of it in an investment that has a 50% chance of being worth $100 and a 50% chance of being worth $0. Bob will
A) definitely make the investment because the expected utility of the investment exceeds the utility of his $50. B) definitely not make the investment because the expected utility of the investment is less than the utility of his $50. C) definitely make the investment because he is indifferent between having $50 and having an investment with an expected value of $50. D) definitely not make the investment because he is indifferent between having $50 and having an investment with an expected value of $50.