A person who has auto insurance is likely to drive a little less safely and to take less care in parking their car in a safe place off the street. This is an example of a problem called:
A. externality.
B. signaling.
C. moral hazard.
D. adverse selection.
Answer: C
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Movie theaters are able to offer discounts to senior citizens because:
a. the elderly deserve lower prices because of their contributions to society. b. senior citizens have the most inelastic demand. c. theaters can separate senior citizens from other customers, and it is easier to prevent resale. d. senior citizens cannot see the movie very well because of poor eyesight. e. senior citizens are frequent visitors to the movie theaters.
The Save More Tomorrow (SMarT) program found all of the following except that:
A. participants quadrupled their savings in just a couple of years. B. if the default choice is to save a portion of income, people will save more. C. people were already saving at an optimal amount, so the program had no effect. D. people want to save more than they typically do.
Suppose an increase in government spending stimulates real GDP without affecting the price level. What is the relevant range of the aggregate supply curve in this case?
A. the classical range B. the intermediate range C. the Keynesian range D. the monetarist range
The phrase "bundle of legal rights" is properly included in
A) the definition of real property. B) a legal description. C) real estate transactions. D) leases for less than one year.