The insurance industry is susceptible to moral hazard problems, but not problems of adverse selection.
Answer the following statement true (T) or false (F)
False
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Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what quantity of TV repairs should Dee undertake?
A) 0 per week B) 10 per week C) 20 per week D) 30 per week
When people by insurance they often adopt risky behavior. This is an example of
A) adverse selection. B) moral hazard. C) a negative externality. D) moral hazard and a negative externality.
Marginal utility per dollar spent on good X is
a. total utility of X divided by its price. b. marginal utility of X divided by its price. c. the change in marginal utility of good X. d. none of the above
The corporate form of business allows a more efficient way to manage risk relative to
A) proprietorships. B) partnerships. C) other non-corporate forms of business. D) all of these choices.