Your bank account pays 3% interest per year. You loan a friend $100 for one year at zero interest. Assuming the loan is paid on time the opportunity cost of the loan is

To maximize its profit, the firm in the figure above will produce ________ jeans and set a price ________ per pair of jeans

A) 150; between $50 and $25 B) 125; $25 C) 125; $50 D) 125; $75 E) None of the above answers are correct.

What would best explain why a generally risk-averse person would bet $100 during a night of blackjack in Las Vegas?

A) Risk aversion relates to income choices only, not expenditure choices. B) Risk averse people may gamble under some circumstances. C) The economics of gambling and the economics of income risk are two different things. D) Risk-averse people attach high subjective probabilities to favorable outcomes, even when objective probabilities are known.