Insurance companies
A) pool risk and thereby lower people's utility.
B) can earn a profit only if people are risk neutral.
C) can increase risk averse people's utility.
D) try to shift their customers' utility of wealth curves downward.
C
You might also like to view...
What information is provided by a demand curve? What variables are measured along the axes of the graph?
What will be an ideal response?
What is the impact of an interest ceiling on bank deposits but not on loans?
A tariff differs from a quota in that a tariff is a. levied on imports, whereas a quota is imposed on exports
b. levied on exports, whereas a quota is imposed on imports. c. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. d. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.
Which of the following about price discrimination is true?
a. A price-discriminating seller will charge consumers with an elastic demand a lower price than consumers with an inelastic demand. b. A firm must face a horizontal demand curve for its product in order to engage in effective price discrimination in a market. c. Price discrimination always harms consumers and helps sellers in the short run but in the long run, consumers benefit at the expense of sellers. d. A seller must have a monopoly in order to gain from price discrimination.