If insurance companies knew how risk-averse their customers were:
A. adverse selection would not occur.
B. diversification would not occur.
C. policies would be perfectly diversified, resulting in lower premiums for everyone.
D. risk pooling would not occur.
A. adverse selection would not occur.
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Large amusement parks charge entrance fees rather than fee per ride because
a. Customers are more sensitive to paying a fee per ride b. Customers are less sensitive to paying a fee per ride c. Customers view paying per ride as a smaller cost d. None of the above
The equilibrium wage
a. is the same in all labor markets b. occurs where the supply of labor curve begins to bend backward c. cannot be calculated because there are so many labor markets d. is determined by the market demand for labor and the market supply of labor e. is irrelevant because of unions
The velocity of circulation is the
a. speed at which the multiplier takes effect. b. speed at which money circulates. c. speed at which tax cuts get spent. d. rate at which money creation takes place.
The above table shows marginal costs and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 25 percent
A. the marginal benefit of clean air exceeds the marginal cost. B. the quantity of clean air is optimal. C. the quantity of polluted air is 25 percent. D. the marginal benefit of clean air is less than the marginal cost.