Insurance policies in which each firm pays a different price for medical insurance depending upon the past medical bills of the firm's employees are based upon a(n):
A. experience rating.
B. community rating.
C. asymmetric information rating.
D. adverse selection rating.
Answer: A
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Mika borrows $100,000 to start up her own beauty shop. She pays 5 percent interest on her loan. In order to account for all costs of her business, Mika must not forget:
A. the explicit cost of $5,000. B. the implicit cost of $5,000. C. the explicit cost of $105,000. D. the implicit cost of $100,000.
If society allows firms to freely pollute the environment, then which of the following is true?
a. The efficient output level can be achieved by giving firms a subsidy for the pollution they generate. b. Market equilibrium output will be too high relative to the efficient output level. c. Market equilibrium output will be too low relative to the efficient output level. d. Market equilibrium output will be equivalent to the efficient output level.
Regional integration is better known as global integration through the World Trade Organization.
a. true b. false
Which of the following is true when an economy is producing efficiently?
A. The economy is producing on the production possibilities curve. B. The economy is getting the fewest goods and services from the available resources. C. Everyone in the economy is happy. D. The economy is producing outside the production possibilities curve.