In general, the more risk averse a defendant is, the ________ willing the defendant is to settle, and the ________ the amount the defendant will pay as a settlement.

Suppose a family has saved enough for a 10 day vacation (the only one they will be able to take for 10 years) and has a utility function U = V1/2 (where V is the number of healthy vacation days they experience). Suppose they are not a particularly healthy family and the probability that someone will have a vacation ruining illness (V = 0) is 30%. What is the expected value of V?

a. 10 b. 7 c. 3 d. 0

Assume a two-country, two-commodity, and two-input model. Let the two countries in this model be the United States and the Rest of the World and the two goods being produced by each of the countries be steel and wheat. The two factors of production used in producing the goods in each country are capital and land. If the United States is capital-abundant and steel production is capital-intensive, the Heckscher-Ohlin model would predict that the United States would

A. export wheat and import steel. B. import both the goods from the Rest of the World. C. export both the goods to the Rest of the World. D. export steel and import wheat.