Which of the following statements is correct?
a. A high-risk person is more likely to apply for insurance than a low-risk person because a high-risk person would benefit more from insurance protection.
b. A low-risk person is more likely to apply for insurance than a high-risk person because a low-risk person would benefit more from insurance protection.
c. Insurance companies can fully guard against the problem of adverse selection, but they cannot fully guard against the problem of moral hazard.
d. Insurance companies can fully guard against the problem of moral hazard, but they cannot fully guard against the problem of adverse selection.
a
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Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Scott's opportunity cost of producing 1 taco is
A) 1/2 of a pizza. B) 1 pizza. C) 2 pizzas. D) 20 pizzas. E) 2 tacos.
In repeated games:
A. players no longer need commitment strategies to reach a mutually beneficial equilibrium. B. players will never reach a mutually beneficial equilibrium. C. there are no dominant strategies. D. negative-negative outcomes are the only outcomes possible.
Shortages normally accompany an effective price floor
a. True b. False Indicate whether the statement is true or false
Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is
a. physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. b. physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer. c. technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. d. technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.