Relating to the Economics in Practice on page 357: An individual with a parent who has Huntington's disease has a 50 percent chance of also having the disease, and can use this information when deciding on the purchase of health insurance. This is an example of ________ favoring potential insurance buyers.
A. adverse selection
B. moral hazard
C. asymmetric information
D. market signaling
Answer: C
You might also like to view...
A firm's total fixed cost (TFC) is a cost
A) it is certain ("fixed") that the firm must pay. B) that does not change as output changes. C) that is dependent on marginal cost. D) that is paid in only the long run.
Which of the following is an example of a factor that a firm's owners and managers can control in making the firm successful?
A) the ability to produce the product at a lower cost B) the number of competitors in the market C) changing consumer tastes D) a rise in the price of a key input, for example, a rise in the price of oil leads to higher energy costs
Suppose residents of Toadhop live on the Quabache River, a river prone to flooding. Suppose there are 1000 (type A) people who value flood control more than the 1000 (type B) people. Type A Demand QD = 100 ? P Type B Demand QD = 50 ? P Where Q measures the quality of flood control. If the price of a unit of flood control is $100,000 and the citizens of Toadhop did not work together the amount
of flood control purchased would be a. 0 b. 10 c. 25 d. 70
Assume soybeans are produced in a perfectly competitive market. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing ________ bushels of soybeans, and his profit will be ________.
A. fewer; the same B. more; the same C. fewer; lower D. the same number of; the same