A monopolist faces the market demand curve

The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house

If there is a 20 percent chance that the home could be entirely destroyed, would this person buy a $20,000 insurance policy to replace the house if destroyed? A) No, it is too expensive. B) No, he is not risk averse. C) Yes, the homeowner would pay even more. D) Yes, this is the most the homeowner would pay.

Ceteris paribus, in the long run, a negative supply shock causes

A) the long-run aggregate supply curve to shift to the left. B) unemployment to fall below its short-run level. C) equilibrium real GDP to fall. D) the price level to rise initially, and then return to its lower level.