Answer the following statements true (T) or false (F)
1. When the government bails out failing banks, it creates a moral hazard problem; but when the government bails out homeowners who are defaulting, there is no moral hazard problem.
2. When critics of unemployment insurance claim that some of the unemployed are not exerting much effort to find jobs because of the unemployment benefits, they are referring to the moral hazard problem.
3. E-bay and Amazon provide "sellers' ratings" information based on the experiences of past buyers. This is to help resolve the adverse selection problem faced by potential buyers.
4. An example of an adverse selection problem is in insurance, where the people most likely to claim insurance payouts are the people who will seek to buy the most generous policies.
1. FALSE
2. TRUE
3. TRUE
4. TRUE
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Every month when the Bureau of Labor Statistics (BLS) announces the unemployment rate, it also announces the number of jobs the economy has gained or lost. Where does the BLS get the data about jobs?
a. from the survey of 60,000 households, which is called the Current Population Survey b. from the Establishment Survey that measures both frictional and structural unemployment c. from the survey of 160,000 business that have over 40 million workers on their payrolls d. from the Congressional Budget Office, which also calculates the GDP of the United States
The Scarcity Principle tells us ________, and the Cost-Benefit Principle tells us ________.
A. how to make good choices; that choices involve costs and benefits B. how to make choices; that choices must be made C. that choices must be made; how to make good choices D. that good choices eliminate scarcity; how to make good choices
The set of acquired skills and abilities that workers bring to the production of goods and services is:
A) money. B) wealth. C) human capital. D) natural ability.
Based on the following game, what are the secure strategies for player 1 and player 2?Player 1Player 2??t1t2?S110,1515,8?S2-10,710,20
A. S2 and t1 B. S1 and t2 C. S1 and t1 D. S2 and t2