An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without
b. people drive less safely with more airbags than without
c. football players avoid 'spearing' with their heads even with safer helmets
d. people read the medicine warnings as carefully when self-medicating as with a doctor's prescription
b
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Refer to Figure 13.1. Assume the voting method used to select a location for the recreation center is the Borda-count method
The residents of Desert Sands, realizing that they have no chance of winning this election, decide to remove their town from contention, so now with only 3 towns in the running, if a town gets ranked #1, it gets 2 points per vote, a town ranked #2 gets 1 point per vote, and a town ranked #3 gets no points per vote. With this method, the town that wins in this election is A) There is no clear winner in this election. B) Glacier Cove. C) Mountain View. D) Oceanside.
If only one firm in an industry could take advantage of a reduced wage and all other firms continue paying the old wage, how would one best describe the one firm's reaction to this reduced wage assuming labor is the only variable input? The
marginal revenue product of labor curve A) would remain unchanged, and the firm would hire more labor at the lower wage. B) shifts to the left, and the firm hires more labor at the lower wage on the new curve. C) shifts to the right, and the firm hires more labor at the lower wage on the new curve. D) shifts to the left, and the firm hires less labor at the lower wage on the new curve. E) shifts to the right, and the firm hires less labor at the lower wage on the new curve.
The rate of return that financial investors require to hold a risky asset minus the rate of return on a safe asset is called the:
A. nominal interest rate. B. real interest rate. C. risk premium. D. discount rate.
Because the open-economy macroeconomic model focuses on the long run, it is assumed that
a. GDP, but not the price level is given. b. the price level, but not GDP is given. c. both the price level and GDP are given. d. the price level and GDP are variables to be determined by the model.