Given that Tamar is a risk-averse person, she might accept a bet with a 50 percent chance of losing $100 today if she had a 50 percent
a. chance of winning $120 in two years and the interest rate was 11%.
b. chance of winning $114 in two years and the interest rate was 7%.
c. chance of winning $110 in two years and the interest rate was 3%.
d. None of the above are correct; a risk averse person would not accept any of the above bets.
c
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When drawing a production possibilities frontier, which of the following is held constant?
A) the amount of money in the economy B) the available factors of production and the state of technology C) the prices of goods and services D) the quantity of the goods and services that are produced E) None of the above because nothing is held constant when drawing the production possibilities frontier.
If movie theaters began collecting more gross income from ticket sales after lowering ticket prices, we would know
A) movie patrons were not behaving consistently with the law of demand. B) movie quality must have increased. C) the demand for movie tickets was elastic. D) the demand for movie tickets was inelastic. E) the supply of movies had increased.