The problem of moral hazard arises because _____
a. individuals receive insurance through their employer, who has different incentives
b. individuals with insurance have no incentive to avoid insured expenditures
c. some individuals have religious objections to purchasing insurance
d. some individuals are immoral
b
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This factor contributes to the winner's curse
a. your estimate of the value of the object was not the most optimistic b. your bid was not the highest c. there were many other bidders that you beat out d. you did not shade your bid enough
The precautionary demand for money is the demand for money:
a. for normal transactions purposes. b. for normal investment purposes. c. for special stock purchases. d. to protect against inflation. e. to cover unexpected events.
According to the law of demand, all else constant, a rise in price will decrease the demand for a good, and a decrease in price will increase demand for a good
a. True b. False Indicate whether the statement is true or false
The principle that people should pay taxes based on the benefits they receive from government services is called the
a. pay principle. b. tax-benefit principle. c. government services principle. d. benefits principle.