Concerning economic growth, which of the following is true?
a. A favorable institutional environment will tend to attract more investment in human and physical capital.
b. Poor nations grow slowly because they do not have access to modern technology
c. Human and physical capital investments are largely irrelevant to economic growth.
d. Nations achieve high rates of economic growth primarily because of their natural resource endowments.
Answer: a. A favorable institutional environment will tend to attract more investment in human and physical capital.
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If beginning stocks for 2014/2015 are adjusted upward in the May (2014) WASDE report, then the estimate of the supply of corn for 2014/15:
a. Is decreased b. Is increased c. Is not affected by the adjustment
Health care that actually harms the patient, such as an adverse reaction to a prescription drug is called:
a. adverse selection. b. morbidity-related response. c. moral hazard. d. defensive medicine. e. iatrogenic disease
Answer the following questions true (T) or false (F)
1. Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. 2. Vaccinations tend to result in a positive externality. 3. College education tends to result in a negative externality because the recipient does not receive the full benefit of the education.
ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. If the interest rate is 10%, the firm
A. is just indifferent between undertaking the investment and not. B. should forgo the investment. C. should undertake the investment. D. indeterminate from the given information