Risk pooling occurs when:
A. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual.
B. people organize themselves in groups according to how risk-averse they are.
C. people organize themselves in groups according to recognizable characteristics.
D. companies organize individuals into groups according to how risk-averse they are.
A. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual.
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Which type of offering typically has the lowest fees?
A) initial public offering of stocks B) secondary offering C) offering of investment-grade bonds D) offering of non-investment-grade bonds
The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer), is $50 as Ed's opportunity cost of selling is $135 and Luis' valuation of the good is $185 . If each gains $25 from this transaction, which of the following conclusions can be drawn?
a. Transaction costs are zero. b. Luis has higher bargaining power than Ed. c. Ed has higher bargaining power than Luis. d. Transaction costs are positive.
Making a decision at the margin is __________ an all-or-nothing decision
A) consistent with B) inconsistent with C) the same as making D) conditioned upon making
The Heckscher-Ohlin (H-O) theory suggests that research and development activity is most likely to be concentrated in countries which
A. are skilled-labor abundant. B. specialize in the production of primary commodities. C. are more self-reliant. D. are capital-abundant.