Many insurance companies sell group policies that cover all of the employees at a particular firm, or all of the members of a particular organization. How could this policy help to overcome the problem of adverse selection?
What will be an ideal response?
By requiring all of the members of the firm or organization to purchase insurance then an average premium based on the group would work. If, on the other hand the average premium is charged but purchasing is voluntary, only the people who are high risk or feel they really need the insurance will purchase it.
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In the above table, for Mary the opportunity cost of producing a dress is ________ and the opportunity cost for Mark of producing a dress is ________
A) 1 1/2 jackets; 2 1/2 jackets B) 1 jacket; 1 jacket C) 1 dress; 1 dress D) 1 1/2 jackets; 2/3 of a jacket E) 1 1/4 jackets; 1/2 of a jacket
When the price of the good or service it produces rises, the firm's
A) demand for labor curve shifts rightward. B) demand for labor curve shifts leftward. C) demand for labor curve remains unchanged. D) output decreases.
A decrease in the U.S. price level, other things constant, will _____
a. stimulate U.S. exports, pushing the aggregate demand curve to the right b. stimulate U.S. imports, pushing the aggregate demand curve to the right c. stimulate U.S. exports but discourage imports, causing a downward movement along a given aggregate demand curve d. discourage U.S. exports but stimulate imports, causing an upward movement along a given aggregate demand curve e. not affect U.S. net exports, so the aggregate quantity demanded will remain constant
Explain what guaranteed price matching means. What are the consequences of such a policy?
What will be an ideal response?