When Jimmy is shopping for fire insurance for his condo, he finds that the insurance companies all require smoke detectors be installed before they will issue a policy. This is a way for the insurance companies to help reduce the problem of ________
Fill in the blank(s) with correct word
moral hazard
You might also like to view...
A determinant of the price elasticity of supply is the extent to which
A) consumers like the quality of the good. B) the demand for the good is relatively elastic. C) the good has many consumer substitutes. D) production of the good uses commonly available resources.
Refer to Figure 2-6. If the economy is currently producing at point C, what is the opportunity cost of moving to point B?
A) 13 thousand hammers B) 30 thousand wrenches C) 23 thousand hammers D) 10 thousand wrenches
An externality is internalized if
A. the person(s) or group that generated the externality incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. B. people are made aware of it and realize that social benefits are less than private benefits (in the case of a positive externality) and that social costs are less than private costs (in the case of a negative externality). C. the person(s) or group that generated the externality do not incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. D. b and c E. none of the above
According to Keynes, the key difference between money and bonds is that
A) money is an asset. B) bonds are an asset. C) money is less risky. D) bonds are tax exempt.