If Joel buys ten floppy disks, which are worth a total of $30 to him, and he pays $1 a disk, how much consumer surplus does he derive?
a. $24
b. $15
c. $20
d. $10
e. $2 from each floppy disk
C
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Does the proprietor of a grocery store who owns the building in which his business is located have lower costs than a grocery store proprietor who must pay rent for the building in which his store is located?
A) No, because no two businesses will be exactly the same. B) No, because the owner-proprietor loses the rent he could otherwise have been paid. C) Yes, because he can afford to set lower percentage markups. D) Yes, if the cost saving is not offset by higher expenses in other areas.
What is a risk premium?
What will be an ideal response?
Under which act did Congress set national standards for the amount of pollution that could be released into the atmosphere?
a. The Clean Air Act of 1970 b. The Clean Water Act of 1972 c. The Resource Conservation and Recovery Act of 1976 d. The Superfund law of 1980
Insurance companies try to mitigate the problem of adverse selection by:
A. charging a higher premium to groups with similar ages or behaviors that correlate with risky behavior. B. asking potential customers a seemingly endless list of questions to gain as much information as they can about the person's risk characteristics. C. charge a higher price to all individuals to cover the lack of information. D. All of these statements are true.