Which of the following activities describes the opportunity cost of attending an economics class?
What will be an ideal response?
the value of the highest valued alternative that must be forgone because of attending the class
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A major principle of economics is that people respond to incentives
Indicate whether the statement is true or false
Moral hazard
a. makes a free market in insurance hard to operate. b. is the tendency of insurance to encourage the source of risk. c. tends to make the cost of insurance higher and the market for insurance less efficient. d. All of the above are correct.
In the United States, what percentage of businesses are sole proprietorships?
a. 10% b. 25% c. 50% d. 75%
Economists generally prefer direct regulation to incentive-based programs because explicit regulation tends to be more efficient.
Answer the following statement true (T) or false (F)