Which of the following is true about a risk-averse individual facing a full menu of actuarily fair insurance contracts to choose from?
A. The individual will "over-insure" if consumption is more meaningful in the good state.
B. The individual will "over-insure" if consumption is more meaningful in the bad state.
C. The individual will fully insure when tastes are state-independent.
D. (a) and (b) are true.
E. (a) and (c) are true.
F. (b) and (c) are true.
G. All of the above.
H. None of the above.
Answer: F
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The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
A) cut the federal government's ties with Fannie Mae and Freddy Mac. B) prohibits banks from selling mortgage backed securities, which were largely to blame for the financial market crisis in 2007-2008. C) eliminated the Federal Deposit Insurance Corporation. D) had restrictions that try to limit risky investment by banks.
The price of a good rises by 12 percent and the price elasticity of demand for the good is 0.85. Which of the following is a CORRECT interpretation of these facts?
A) When the price rises by 12 percent, the quantity demanded decreased by 0.85 percent. B) For each 1 percent that the price rose, the quantity demanded decreased by 10.2 percent. C) For each 0.85 percent that the price rose, the quantity demanded decreased by 1 percent. D) For each 1 percent that the price rose, the quantity demanded decreased by 0.85 percent.
Suppose that the government wants to increase income without changing the interest rate. How can they accomplish this?
a. Increase government spending and reduce the money supply. b. Increase government spending and the money supply. c. Increase taxes and the money supply. d. Reduce government spending and increase the money supply.
The lag in the political rights of women can be positively associated with the lag in female wages and skill acquisition according to Goldin (1990)
Indicate whether the statement is true or false