In the classic 1944 movie Double Indemnity, Barbara Stanwyck plays Phyllis Dietrichson, a woman who has devised a scheme with insurance agent Walter Neff, played by Fred MacMurray, to trick her husband into signing a life insurance policy and then kill
him to collect the proceeds of the policy. In this scheme to murder her husband, Phyllis and her partner Walter took advantage of the husband when getting him to sign the life insurance policy, a situation which describes
A) rational ignorance.
B) the principal-agent problem.
C) adverse selection.
D) moral hazard.
Answer: C
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The concept that Mr. Jones is going to enjoy the benefits of police protection even though he no longer pays taxes is called
A) the free-rider problem. B) the negative externality principle. C) the principle of rival consumption. D) the principle of anti-trust.
Sophia sits behind Gabriel on an airplane. Gabriel owns the right to recline his seat and values this right at $10 . Sophia values a non-reclined seat in front of her at $20 . Assuming no transaction costs, an efficient solution would be for Sophia to pay Gabriel $15 to not recline his seat
a. True b. False Indicate whether the statement is true or false
What are the cost and benefits to a country instituting capital controls?
What will be an ideal response?
Refer to the graphs below. They show the long-run average total cost (LRATC) for a product. For which graph would a firm experience first economies and then diseconomies of scale over its range of output?
A. Graph A
B. Graph B
C. Graph C
D. Graph D