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.
D
Economics
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According to the budget line in the above figure, which of the following combinations is unaffordable?
A) 1 pizza and 3 CDs B) 3 pizzas and 2 CDs C) 2 pizzas and 4 CDs D) All of the above are affordable.
Economics
Rising prices erode the value of money as a ________ and as a ________
A) store of value; unit of liquidity B) medium of exchange; store of value C) store of value; unit of barter D) unit of barter; unit of account
Economics