Suppose someone knew that the probability of incurring a $10,000 medical expense was 5%, and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $600 premium it would cost to get full coverage and decided to buy the insurance, then economists would say they are
A. risk-averse.
B. risk-neutral.
C. Irrational.
D. risk-loving.
Answer: A
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A lump-sum tax:
A. takes the same percentage of taxes from income from all taxpayers. B. requires those with low incomes to pay a smaller percentage of their income than high-income people. C. is levied so that low-income taxpayers pay a greater proportion of their income toward taxes than high-income taxpayers. D. taxes everyone the same amount, regardless of their income.
For economic efficiency, which of the following conditions should be met?
a. Scarcer goods should have lower prices. b. More abundant goods should have lower prices. c. More abundant goods should have higher prices. d. All goods should have equal prices.
Profit is the return to entrepreneurship
a. True b. False Indicate whether the statement is true or false
The work of John Maynard Keynes led to a major revolution in economic thought
Indicate whether the statement is true or false