When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance, the insurance market is said to face the problem of
A) moral hazard.
B) adverse selection.
C) asymmetric information.
D) economic irrationality.
Answer: A
You might also like to view...
The relationship between the level of prices and the total demand for all goods and services is known as
A) aggregate demand. B) market supply. C) market demand. D) aggregate supply.
If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that
A) demand decreased. B) supply increased. C) demand increased. D) supply decreased.
Which of the following statements best describes relative inflation?
a. If the currency of the country Currencia is experiencing relatively low inflation, then its buying power is decreasing and international investors will be less eager to hold it. b. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is increasing and international investors will be less eager to hold it. c. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is decreasing and international investors will be less eager to hold it. d. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is increasing and international investors will be less eager to hold it.
Suppose an the government has a current tax rate of c. Knowing the Laffer Curve is depicted below advise the president on whether the tax rate should be increased, decreased, or remain the same.
