Use the following scenario for the question below. A group of 100 people seeks out an insurance company to underwrite health insurance for its members. The expected medical spending for the group is $150,000. What will the average premium be if the health insurance company estimates the premium adding net loading costs of 15 percent?
a. $1,200
b. $2,250
c. $1,500
d. $1,725
e. $1,765
e. $1,765
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China has experienced particularly high rates of economic growth as a result of
A. High rates of government spending. B. High rates of consumer spending. C. High rates of capital investment. D. Low rates of saving.
Smyth Industries operated as a monopolist for the past several years, earning annual profits amounting to $50 million, which it could have maintained if Jones Incorporated did not enter the market. The result of this increased competition is lower prices and lower profits; Smyth Industries now earns $10 million annually. The managers of Smyth Industries are trying to devise a plan to drive Jones Incorporated out of the market so Smyth can regain its monopoly position (and profit). One of Smyth's managers suggests pricing its product 50 percent below marginal cost for exactly one year. The estimated impact of such a move is a loss of $1 billion. Ignoring antitrust concerns, answer the following question: If Smyth Industries engages in predatory pricing by slashing its price 50 percent
below marginal cost, the present value of current and future profits is: A. $100 million. B. $0. C. ?$100 million. D. $200 million.
If two goods are complementary, it means that when the price of one good increases, the demand for the other rises.
Answer the following statement true (T) or false (F)
If Canadian speculators expect the euro to appreciate against the U.S. dollar, they would
A. use Canadian dollars to buy euros, instantly use the euros to buy U.S. dollars, and then, instantly use the U.S. dollars to buy Canadian dollars. B. purchase euros. C. purchase U.S. dollars. D. purchase Canadian dollars.