Whether or not a separating equilibrium exists in a competitive market with adverse selection depends on what fraction of consumers is of the high cost type and what fraction is of the low cost type.
Answer the following statement true (T) or false (F)
False
Rationale: Under a separating equilibrium, high cost types are not interested in buying low cost insurance (because only a restricted set of such policies is offered) -- nor are low cost types interested in buying high-priced insurance. What fraction of each type there is in the population is then irrelevant.
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An economy that trades with the rest of the world is a(n) ________.
A. command economy B. closed economy C. open economy D. trade economy
For most low-wage earners
A) the substitution effect of a wage rate increase is likely to equal the income effect. B) the opportunity cost of leisure is high. C) the income effect of a wage rate increase is likely to be larger than the substitution effect. D) the substitution effect of a wage rate increase is likely to be larger than the income effect.
John is a U.S. citizen who works for Walmart located in France. John's work contributes to:
A. U.S. GDP, but not U.S. GNP. B. U.S. GNP, but not U.S. GDP. C. both U.S. GDP and U.S. GNP. D. neither U.S. GDP nor U.S. GNP.
A tax imposed on the sellers of a good
a. raises both the price buyers pay and the net price received by sellers. b. raises the price buyers pay and lowers the net price received by sellers. c. lowers the price buyers pay and raises the net price received by sellers. d. lowers both the price buyers pay and the price received by sellers.