Adverse selection in insurance requires that
a. potential customers face different levels of risk
b. potential customers facing more risk are no more interested in purchasing insurance
c. people are not risk averse
d. insurers can tell higher risk people from lower risk people
a
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The percentage change in quantity supplied that results from a 1 percent change in price is known as the:
A. slope of the supply curve. B. cross-price elasticity of supply. C. cross-price elasticity of demand D. price elasticity of supply
The interest rate that the Fed charges banks that borrow reserves from it is the
a. federal funds rate. b. discount rate. c. reserve requirement. d. prime rate.
The LM statistic requires estimation of the unrestricted model only.
Answer the following statement true (T) or false (F)
A change in the productivity of inputs used to produce a good affects supply because Question 12 options:
A. what is considered to be a substitute or complement in production changes. B. quality of the product changes and so consumers change their demand for the good. C. the number of sellers changes. D. it increases the number of sellers. E. the costs of production change.