If insurance is fairly priced, a risk-averse individual will purchase enough insurance to cover the full amount of the possible loss
What will be an ideal response?
True. If the insurance is fairly priced, the risk-averse individual's expected utility is maximized when fully covered.
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Which of the following statements regarding human capital is INCORRECT?
A) Human capital is the accumulated skill and knowledge of human beings. B) Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned. C) The accumulation of human capital is the source of both increased productivity and technological advance. D) Writing and mathematics, the most basic of human skills, are crucial elements in economic progress.
Oscar and Felix room together in an apartment in New York City. Oscar is very messy and Felix is obsessed with neatness. Felix cannot stand a messy apartment and is even willing to pay Oscar $50 per week for him to clean up after himself
Oscar hates to clean up so much that he is willing to pay Felix $30 per week to maintain his messy habits. If Felix has the right to a clean apartment explain why the apartment will be clean. If Oscar has the right to remain messy explain why the apartment will still be clean.
Jane purchases snickle-dees only because her friends do. This is
A) price-leadership. B) negative-sum game. C) positive market feedback. D) negative market feedback.
What factors determine how centralized or decentralized the decision-making in an organization should be?