If a pooling equilibrium exists in an insurance market, no separating equilibrium can exist.
Answer the following statement true (T) or false (F)
True
Rationale: The existence of a pooling equilibrium implies that low cost types prefer the pooled policy to a restricted low cost policy that high cost types would not buy. Thus, the fact that the pooling equilibrium exists implies that no separating equilibrium exists.
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Which of the following is a political function of government but is not a central economic function?
A) determining who has a right to vote B) determining government-sponsored and government-inhibited goods C) providing a legal system to adjudicate property rights D) redistributing income from some individuals to others
If the market price falls below the bottom of the firm's ATC curve:
A. the market price must be lower than the firm's AVC. B. Total revenue must be higher than total cost. C. there is no level of output at which the firm can make a profit. D. the firm is earning profits.
The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is maximized when it produces
A) 0 units of output. B) 5 units of output. C) 15 units of output. D) 20 units of output.
Negotiable certificates of deposit were developed in order to
A) compete for loan business that had been going to the commercial paper market. B) circumvent interest rate regulations on deposits. C) increase assets that were acceptable as collateral for discount loans. D) circumvent reserve requirements.