Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. Initially there is a 10 percent chance that the house will be destroyed by hurricane
As the risk of destruction due to hurricane rises from 10 percent to 20 percent, the minimum cost of insurance A) stays the same.
B) increases by $10,000.
C) increases by $20,000.
D) increases by $30,000.
B
Economics
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The price of a seller's product in perfect competition is determined by
A) the individual seller. B) the individual demander. C) market demand and market supply. D) a few of the sellers.
Economics
When firms analyze the relationship between their level of production and their costs they separate the time period involved into
A) a fixed period and a variable period. B) morning and evening. C) the short run and the long run. D) 6 months or less; 6 months to 1 year; more than 1 year.
Economics