One result of asymmetric information in health insurance markets is:
a. adverse selection.
b. an optimal number of insurance policies sold.
c. externalities in consumption.
d. the principal-agent problem.
e. a low marginal benefit of additional information for the buyer of insurance.
a. adverse selection.
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The price elasticity of a vertical demand curve is always
a. infinitely large. b. zero. c. one. d. increasing as price increases.
The different points on a cost curve represent alternative production possibilities in the same time period.
Answer the following statement true (T) or false (F)
An unexpected increase in aggregate demand typically causes
A. the price level to increase but has no effect on the unemployment rate. B. frictional unemployment to increase but structural unemployment to decrease. C. the price level to increase and the unemployment rate to fall. D. the price level to increase and the unemployment rate to increase.
Some people see the government as being more heavily involved in taking sides than in serving the common interest.
Answer the following statement true (T) or false (F)