From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:
A. Marginal cost of more insurance coverage is negative
B. Marginal benefit of more insurance coverage is greater than zero
C. Marginal benefit of more insurance coverage is greater than the marginal cost
D. Marginal cost of more insurance coverage is equal to the payment for the extra coverage
Answer: C
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________ is the amount of money a government collects through a tax
A) Tax incidence B) Tax bracket C) Tax revenue D) Tax burden
Economics is the study of the ________ people make to attain their goals, given their ________ resources
A) decisions; household B) choices; scarce C) purchases; unlimited D) income; available
Which of the following statements is correct?
A) The markup pricing rule that is derived from the rule for profit maximization can be used as a substitute for determining the profit-maximizing level of output by equating marginal revenue and marginal cost. B) It is reasonable to assume that a profit-maximizing firm will never operate in the inelastic portion of its demand curve. C) The ability of a profit-maximizing firm to mark up price above average cost is unaffected by the price elasticity of demand for the firm's output. D) The markup factor and the price elasticity of demand are positively related, i.e., as the price elasticity of demand increases, the markup factor that the profit-maximizing firm can apply to its marginal cost in setting price increases as well.
If Congress passes legislation reducing Federal Reserve independence, financial market participants are likely to assume that
A) the money supply will decline. B) inflation will increase. C) recession will quickly follow. D) the federal deficit will rise.