Suppose Jack just booked a ticket to fly home to see his family for Thanksgiving. When he purchases the ticket, he decides to purchase travel insurance that allows him to get a full refund on his ticket if he's too sick to travel. Knowing this, Jack doesn't bother to take care of himself in the weeks leading up to the trip, reasoning that if he ends up being too sick to travel, then he can always get a full refund. Jack's failure to take care of himself in the weeks leading up to his trip is an example of:
A. a positional externality.
B. the lemons model.
C. moral hazard.
D. adverse selection.
Answer: C
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The observation that consumer purchases of walnuts decline as the price rises reflects:
a. a decrease in demand. b. the law of demand. c. an increase in demand. d. the law of supply.
Which of the following best represents economic growth?
A) an increase in nominal GDP B) an increase in real GDP C) an increase in the per capita nominal GDP D) an increase in the per capita real GDP
If a tax rate is constant as income rises, the tax is proportional
Indicate whether the statement is true or false
Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. The size of the import quota
A. is y?w. B. is y?v. C. is z?v. D. cannot be determined.