If medical insurers could use information contained in DNA to predict the likelihood of major medical illnesses, the most likely outcome is that:
A. there would be an adverse selection problem and average insurance rates would fall.
B. the adverse selection problem would be decreased and average insurance rates would fall.
C. the adverse selection problem would be decreased and average insurance rates would rise.
D. there would be an adverse selection problem and average insurance rates would rise.
Answer: B
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Borrowers who stated but did not document their incomes are referred to as:
A) subprime B) alt A C) adjustable D) securitized
Which of the following best describes the entire U. S. refreshment beverage market?
A) monopoly B) oligopoly C) monopolistic competition D) perfect competition
Suppose there is a technology to produce Grendels such that there are diseconomies of scale after the first unit is produced. There are both fixed (a physical plant called a lair) and variable (food that grows in lairs) costs of production. Which statement is true?
a. b and d. b. Producing multiple units increases the average fixed cost. c. There will be no more than one firm in this industry. d. It is cheaper to make five Grendels by buying five lairs and producing one Grendel in each lair than it is to produce five Grendels in one lair. e. This is an impossible situation.
Which of the following would decrease the supply of airline travel?
a. Reduced number of airline travelers. b. New airline companies beginning operations. c. Higher fuel costs. d. Lower prices for airline tickets.