Jackson buys an automobile insurance policy and then decides to drive recklessly because he knows he is insured in case he has an accident. This describes the problem of
A) adverse selection.
B) asymmetric information.
C) moral hazard.
D) risk pooling.
C
You might also like to view...
A tariff is
A. a voluntary agreement to restrict exports. B. a tax on imported goods. C. a subsidy on domestically produced goods. D. a government-imposed restriction on the quantity of a specific good that can be imported into the country.
The difference between the ________ for a good and the ________ is called consumer surplus
A) lowest price a consumer is willing to pay; price the consumer actually pays B) highest price a consumer is willing to pay; price the consumer actually pays C) highest price a consumer is willing to pay; lowest price a consumer is willing to pay D) price the consumer actually pays; actual cost to the producer
Comparative advantage explains how two nations can benefit from trade.
Answer the following statement true (T) or false (F)
In the short run, if prices were above equilibrium,
a. excess aggregate demand for goods and services would place downward pressure on prices. b. excess aggregate supply of goods and services would place upward pressure on prices. c. excess aggregate demand for goods and services would place upward pressure on prices. d. excess aggregate supply of goods and services would place downward pressure on prices.