If a firm shuts down in the short run, then its:
A. economic loss will equal its variable costs.
B. total revenue and total cost will fall to zero.
C. economic loss will equal its fixed costs.
D. profit will equal zero.
Answer: C
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When applying the marginal principle, you should pick the level at which the activity's marginal benefit equals its marginal cost
Indicate whether the statement is true or false
Health insurance companies impose deductibles on policies and copayments on claims to
A) increase prices. B) increase sales. C) reduce the moral hazard problem. D) increase asymmetric information.
In making decisions about insurance:
A. using hindsight is the only way to truly know what the right decision was. B. you must consider it in light of the best information available at the time. C. you need to weigh the cost of the insurance against the benefit of payouts over the life of the contract. D. None of these statements is true.
A significant feature of the price system in a market economy is that the architecture
A. is created by the government. B. is created spontaneously. C. promotes a system of controls on the employees of an organization. D. promotes skewed distribution of wealth.