Education is heavily subsidized through public schools and government scholarships. This subsidization of education reflects the fact that
a. a negative externality requires a subsidy to move the market equilibrium closer to the social optimum.
b. the social cost of education exceeds the private cost of education.
c. the social value of education exceeds the private value of education.
d. the market-equilibrium quantity of education exceeds the optimal quantity of education.
c
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A bank is solvent when:
A) its stockholders' equity exceeds the value of its assets. B) the value of its liabilities exceeds its stockholders' equity. C) the value of its total assets exceeds the value of its liabilities. D) the value of its liabilities exceeds the value of its assets.
The cost of producing aspirin increases simultaneously as doctors find that one aspirin per day reduces the risk of heart attacks. The supply of aspirin ________ and the demand for aspirin ________ so that the equilibrium price of aspirin ________
A) increases; increases; rises B) decreases; increases; rises C) increases; decreases; might rise, fall, or stay the same D) decreases; increases; might rise, fall, or stay the same
Explain the problems that necessitate insurance management, and three methods insurance companies use to address these problems. Identify the problem that each practice addresses
What will be an ideal response?
The negative impact of the loss of value of collateralized assets is due to
A) asymmetric information. B) Ricardian Equivalence. C) limited commitment. D) financial intermediation through banks.