An example of statistical discrimination would be:
A. charging young drivers a higher premium than older drivers.
B. charging homes near a lake higher premiums for flood insurance than those on a hill.
C. assuming the food will be better at an Italian restaurant than a Chinese one in the Little Italy neighborhood of NYC.
D. All of these are examples of statistical discrimination.
D. All of these are examples of statistical discrimination.
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Explain how redistributing income creates a deadweight loss
What will be an ideal response?
An economic rent is created when
(a) organized labor pushes its members' wages above those of unorganized labor. (b) market forces determine prices and output. (c) businesses take market prices as given. (d) laborers accept competitive wages.
A cartel is defined to be
A) any oligopolistic industry with fewer than 4 firms. B) a form of oligopoly in which firms agree to sell at different prices like in monopolistic competition. C) a form of oligopoly in which firms formally agree to establish a common strategy, often a common price, in effect acting like a monopoly. D) a form of oligopoly in which firms agree to compete with each other on an equal basis.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and nominal value of the domestic currency falls. b. The real risk-free interest rate falls, and nominal value of the domestic currency falls. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.