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 completely destroyed, would this homeowner buy insurance?
A) No, because the homeowner is not risk averse.
B) Yes, at any price because the homeowner is risk averse.
C) Yes, but only if it costs less than $10,000.
D) Yes, but only if it costs less than $20,000.
D
Economics
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Higher tax rates lower the value of the spending multiplier and make the economy more susceptible to shocks
Indicate whether the statement is true or false
Economics
When economists value rewards that will be experienced in the future, they multiply the reward by a:
A) positive factor more than 1. B) positive factor less than 1. C) negative factor more than -1. D) negative factor less than -1.
Economics