A person that is risk averse
A) exhibits decreasing marginal utility of wealth.
B) exhibits increasing marginal utility of wealth.
C) always engages in fair bets.
D) loves lotteries.
A
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Suppose the United states production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German wage doubles, but U.S. wages do not change at all. We now know that
A) the United States has no comparative advantage. B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Not enough information is given. E) Germany gains a comparative advantage in widgets.
If the equation of exchange holds, and if the velocity of money and total output are fixed, then, if the money supply doubles,
A) the price level will increase by half. B) the price level will decrease by half. C) the price level will double. D) the price level will decrease by 25 percent.