Suppose an insurance company determines that the average annual malpractice cost is $10,000 for reckless lawyers and $500 for careful lawyers. If 10% of the lawyers insured by the company are reckless, the company will earn zero economic profit if the price of insurance is:
A. $500.
B. $1,450.
C. $5,250.
D. $10,000.
Answer: B
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Scarcity forces people to
A) cheat and steal. B) consume as much as they can as quickly as they can. C) choose among available alternatives. D) live at a low standard of living. E) be unwilling to help others.
The demand curve for corn is downward sloping. If the price of corn, an inferior good, falls, then
A) the income effect which causes you to increase your corn purchases is larger than the substitution effect which causes you to reduce your corn purchases, resulting in a net increase in quantity demanded. B) the income effect which causes you to reduce your corn purchases is smaller than the substitution effect which causes you to increase your corn purchases, resulting in a net increase in quantity demanded. C) the income and substitution effects offset each other but the price effect of an inferior good leads you to buy less corn. D) both the income and substitution effects reinforce each other to increase the quantity demanded.
Describe the major types of unemployment
What will be an ideal response?
Industries that are truly critical to the national defense should be protected from foreign competition if that is the only way to ensure their existence
a. True b. False Indicate whether the statement is true or false