Adverse selection may lead to
a. owners of used cars choosing to keep them rather than sell them at the low price that skeptical buyers are willing to pay.
b. wages being stuck above the level that balances supply and demand, resulting in unemployment.
c. buyers with low risk choosing to remain uninsured because the policies they are offered fail to reflect their true characteristics.
d. All of the above are correct.
d
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In the figure above, the quantity of low-skilled labor employed is
A) 2,000 hours per day. B) 4,000 hours per day. C) 5,000 hours per day. D) 7,000 hours per day.
Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?
a. a negative income tax b. an Earned Income Tax Credit (EITC) c. an in-kind transfer program d. None of the programs would be favored by Nozick.
Refer to the graph shown. Between points B and D, marginal utility is:
A. positive, and so total utility is increasing. B. increasing, and so total utility is falling. C. positive, and so total utility is falling. D. increasing, and so total utility is at its maximum.
Consider a monopoly where the inverse demand for its product is given by P = 50 ? 2Q. Total costs for this monopolist are estimated to be C(Q) = 100 + 2Q + Q2. At the profit-maximizing combination of output and price, monopoly profit is:
A. $32. B. $92. C. $128. D. $64.