The real cost of owning a home includes certain costs/expenses that many people overlook. Which of the following is NOT such a cost/expense of home ownership?
A) Income lost on cash invested in the home
B) Interest paid on borrowed capital
C) Maintenance and repair expenses
D) Personal property taxes
Answer: D) Personal property taxes
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A demand curve shows
A) the willingness of consumers to substitute one product for another product. B) the relationship between the price of a product and the total benefit consumers receive from the product. C) the willingness of consumers to buy a product at different prices. D) the relationship between the price of a product and the demand for the product.
A decrease in the price of rice from 50 cents to 40 cents a pound increases consumption from 16 to 20 tons a week in Gainesville and from 160 to 200 tons in the larger city of Miami. The elasticity of demand for rice is
A. greater in Miami than in Gainesville, even taking into account the population difference. B. greater in Gainesville than in Miami in spite of the population difference. C. equal in Gainesville and Miami regardless of the population difference. D. impossible to compare because of the population difference.
In the case of a nonexcludable public good, the market will fail to produce the good because of the free rider problem.
Answer the following statement true (T) or false (F)
The difference between moral hazard and adverse selection is
a. moral hazard has to do with unobservable characteristics of individuals b. moral hazard has to do with unobservable actions of individuals c. adverse selection is when individuals change their behaviors because of a contract d. adverse selection is when you choose the wrong answer on a test