A level of insurance is said to be actuarially fair when in which of the following situations?
a. Premiums that someone pays are less than the amount that an average person in that risk group would collect in insurance payments.
b. Everyone in a risk group pays the same amount regardless of insurance payments
collected.
c. Premiums that someone pays are equal to the amount that an average person in that risk group would collect in insurance payments.
d. Everyone in a risk group pays more than the average person in that risk group would collect in insurance payments.
c. Premiums that someone pays are equal to the amount that an average person in that risk group would collect in insurance payments.
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Starting from a balanced budget, which of the following would NOT cause a deficit?
A) A decrease in taxes B) An increase in spending of goods and services C) An increase in transfer payments D) A 50 percent increase in spending accompanied by a 40 percent increase in taxes E) None of the above.
Unions sometimes try to ensure that employers hire more union labor than they might otherwise prefer by
a. collective bargaining b. featherbedding c. work enlargement d. restricting the supply of labor e. increasing the demand for union-made products
Which of the following statements about the economic concept of land is not true?
a. Land includes forests, minerals, and other natural resources. b. Countries that are rich in natural resources are not always successful in exploiting these resources to produce goods and services. c. Land can be combined with labor and capital to produce goods and services. d. Abundant natural resources are necessary for economic growth. e. Countries that lack natural resources need not be characterized by limited economic growth.
Explain how the firm decides on the optimal amount of research and development
What will be an ideal response?