Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . What is the minimum price an insurance company could offer (if it had no other costs)?
a. $10,000
b. $3,000
c. $100,000
d. $5,000
b
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In many developing countries, starting a business involves navigating a labyrinth of rules and regulations and red tape. Paying a bribe to expedite paperwork is a common practice
As Samuel Huntington puts it—"the only thing worse than a society with a rigid, overcentralized, dishonest bureaucracy is one with a rigid, overcentralized, honest bureaucracy." The argument is that bribes increase economic activity because, without bribes to grease bureaucrats' palms, starting a business would be an extremely long, drawn-out process and would probably drive investors away. Is this always the case, or does bureaucratic corruption involve other costs? Explain your answer.
A disadvantage of corporations over a proprietorship or partnership is in the
A) legal liability. B) ability to raise funds. C) taxation system. D) future of the firm when an owner dies.
Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 20 4 2 25 4 3 30 6 Refer to the above data. The nominal GDP for year 3 is:
a) 125 percent higher than the nominal GDP for year 1. b) 50 percent higher than the nominal GDP for year 1. c) $120. d) $30.
Which statement is true?
A. Most collective bargaining negotiations end in strikes. B. The two key provisions in a collective bargaining agreement are (1) wages and hours and (2) job security and seniority. C. Most strikes have disrupted our economy. D. None of these statements are true.