Which of the following insurance practices attempts to minimize the adverse selection problem insurance companies face?
A) prevention of fraud
B) risk-based premiums
C) restrictive provisions
D) deductibles
B
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Use the following diagram to answer the next question.
The most likely cause for a shift in the production possibilities frontier from AB to CD is
A. the use of the economy's resources in a less efficient way. B. an increase in government purchase of the economy's output. C. an increase in the quantity and quality of labor resources. D. an increase in the spending of business and consumers.
As a firm attempts to increase its production, its long-run average costs eventually rise because of
A) the law of diminishing returns. B) diseconomies of scale. C) fixed capital. D) insufficient demand.
The notion that a decline in tax rates and other incentives will spur individuals and firms to increase productivity is typically referred to as
A) demand-side economics. B) Ricardian equivalence. C) supply-side economics. D) Keynesian economics.
Which economist won the Nobel Prize for using experiments to test the model of supply and demand?
A. Vernon Smith B. Adam Smith C. Alfred Marshall D. Steven Levitt