An economy can improve its standard of living by
A) reducing the amount of human capital workers have.
B) increasing the amount of capital available per hour worked.
C) organizing production so that the quantity of goods produced per hour will decrease.
D) all of the above
B
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Johnny owns a house that would cost $100,000 to replace should it ever be destroyed by fire. There is a 0.1% chance that the house could be destroyed during the course of a year. Johnny's utility function is U = W0.5
How much would fair insurance cost that completely replaces the house if destroyed by fire? Assuming that Johnny has no other wealth, how much would Johnny be willing to pay for such an insurance policy? Why the difference?
The calculation of stockholder wealth involves
A) the time-value of money concept. B) the cash flow stream. C) business and financial risk. D) All of the above