As a result, of adverse selection problems in the fire insurance market, it is likely that over time
A. fewer low-risk and high-risk people will be insured.
B. fewer high-risk people will be insured.
C. more low-risk people will be insured.
D. fewer low-risk people will be insured.
Answer: D
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
After getting an A on your economics exam, you decide to go to your favorite Mexican restaurant to celebrate. You are having trouble deciding whether to order the chipotle chicken chimichanga or the cilantro seafood enchiladas
Use the rule of equal marginal utility per dollar to determine which one to purchase: (a) the chimichanga for $8 which gives you 120 units of utility, or (b) the enchiladas for $15 which gives you 195 units of utility?
Assume that the Cambridge k = 0.25. If the transactions demand for money is equal to $20,000, then income is equal to
A) $20,000. B) $80,000. C) $10,000. D) $5,000.
The above figure shows the demand and cost curves facing a monopoly. If a $100 per unit tax is charged, the loss in welfare resulting from the tax is
A) $250. B) $312.50. C) $1,250. D) $1,562.50.