Exam 26: Extension F: Review

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. What is Jennifer's expected wealth?

If the interest rate is 5 percent, the present value of $2,000 to be received one year from today is about

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. The maximum amount that Jennifer is willing to pay for auto insurance is

The big tradeoff is a tradeoff between

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. What is Jennifer's expected utility?

-Jennifer owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. An insurance company agrees to pay a car owner like Jennifer the full value her car, if the car owner buys the company's insurance policy. The company's operating expenses are $1,000. What is the minimum insurance premium that the company is willing to accept?

Contests can help explain why

Abigail's Tax Help, is a firm that sells advice to taxpayers. Abigail is considering buying a new computer that costs $1,600. She expects that the computer will generate additional profit of $1,200 at the end of the first year and $500 at the end of the second year, after which it will be worthless. If the annual interest rate in the next two years is 8 percent, what is the present value of the profit from the the computer?

-Oligopoly differs from perfect competition because a single competitive firm's behavior does not affect the behavior of its competitors while the behavior of a single oligopolistic firm does affect the behavior of its rivals.

-In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The quantity of low-skilled labor employed is

-In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The quantity of high-skilled labor employed is

-In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. In the market for high-skilled labor, the equilibrium wage rate is

-In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The difference in wage rate between low-skilled and high-skilled labor is

-In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. In the market for low-skilled labor, the equilibrium wage rate is

Abigail's Tax Help, is a firm that sells advice to taxpayers. Abigail is considering buying a new computer that costs $1,500. She expects that the computer will generate an additional profit of $1,200 at the end of the first year and $500 at the end of the second year, after which it will be worthless. If the annual interest rate in the next two years is 5 percent, what is the present value of the profit from the computer?

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. Jennifer would have the same expected utility as she currently has if her wealth was ________ with no risk.

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. An insurance company agrees to pay a car owner like Jennifer the full value her car, if the car owner buys the company's insurance policy. The company's operating expenses are $1,000. Jennifer will

If the interest rate is 5 percent, the present value of $2,000 to be received two years from today is about