ECON252 FINAL EXAM 04-30-2013 - BLUE (KEY)

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Unformatted text preview: 48. Which of the following events will increase the frictional rate of unemployment in an economy? A. An increase in the minimum wage rate. B. A decrease in the union wage rate. C. An increase in the duration of unemployment insurance coverage. *** D. The economy goes into recession. 49. Sally works part‐time in a café, and Serena owns and operates a local fashion boutique. According to the Bureau of Labor Statistics, A. Sally is unemployed and Serena is employed. B. Sally is employed and Serena is not in the labor force. C. Sally and Serena are both unemployed. D. Sally and Serena are both employed. *** 50. Which of the following statements is not correct for a risk averse person? A. The marginal utility of wealth decreases as wealth increases. B. The total utility of wealth increases as wealth increases. C. The pleasure of winning a dollar is outweighed by the pain of losing a dollar in a fair gamble. D. The person will always accept a fair (50/50 odds) gamble. *** E. [All of the above] 51. Jacob estimates that the value of a stock of Cisco Systems is less than the current market price. According to fundamentals analysis, A. the stock is fairly valued and you should consider adding it to your portfolio of assets. B. the stock is overvalued and you should not add it to your portfolio of assets. *** C. the stock is undervalued and you should consider adding it to your portfolio of assets. D. the stock is fairly valued and you should consider selling it if you already own the stock. 52. Which of the following statements is NOT correct? A. Risk and return are positively correlated. B. Bonds are more risky than s...
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