Blanca would prefer a certain income of $20,000 to a gamble with a 0.5 probability of $10,000 and a 0.5 probability of $30,000. Based on this information:
A) we can infer that Blanca neutral.
B) we can infer that Blanca is risk averse.
C) we can infer that Blanca is risk loving.
D) we cannot infer Blanca's risk preferences.
B
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If production of a good creates external benefits, a competitive market will likely produce
a. less output than would maximize profit. b. more output than would maximize profit. c. less output than is efficient. d. more output than is efficient.
Which of the following statement(s) best describes trade-offs?
a. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish. b. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. c. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. d. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish.