If the U.S. Supreme Court ruled that states could no longer require people to have auto insurance, do you think most people would cancel their policies? Explain.
What will be an ideal response?
Probably not. Auto insurance falls under the principle that risk requires compensation. For most people the additional risk they would face of driving without insurance exceeds the cost of the insurance, so they are better off purchasing auto insurance to reduce their risk.
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If government regulations significantly increase the cost of operating within a particular market, one result is that
A) new firms are discouraged from entering the market. B) barriers to entry are nullified. C) a perfectly competitive market environment is encouraged. D) new firms are encouraged to enter the market.
The amount that a firm receives from the sale of goods and services is called:
A. total cost. B. total revenue. C. profit. D. maximum profit.
Nondiscriminating monopoly is similar to perfect competition in that
a. they have the same level of barriers to entry b. they have a similar number of firms in the industry c. the demand curve facing the firm is perfectly elastic for both d. price equals marginal revenue for both e. price equals average revenue for both
Last year a country had $700 billion of saving and $900 of investment. This year it had $1000 billion of saving and $800 billion of investment. By how much did net capital outflow change? By how much did net exports change? How is it possible for a country to have saving that is greater than investment?