Adverse selection occurs when
A) a person takes more risks that are not known to the life insurance company because he has life insurance.
B) a person buys life insurance because he has a risky lifestyle that is not known to the life insurance company.
C) a person is a risk lover.
D) pregnant women with health insurance make more doctor visits than uninsured pregnant women.
B
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Define the following terms and explain their importance to the study of macroeconomics:
a. velocity b. equation of exchange c. monetarism d. automatic stabilizer
Homeowners can deduct interest payments on their mortgages from their federal income tax. If this deduction were removed, how would the housing market be affected?
The short-run average total cost curve is generally assumed to be:
A. downward-sloping. B. U-shaped. C. upward-sloping. D. horizontal.
When a monopolistically competitive firm is in long-run equilibrium:
A. production takes place where ATC is minimized. B. marginal revenue equals marginal cost and price equals average total cost. C. normal profit is zero and price equals marginal cost. D. economic profit is zero and price equals marginal cost.