Whether exchanges are strictly domestic or across international borders, every party to any transaction
A. must pay the highest retail value.
B. expects to gain.
C. tries to break even.
D. produces the highest rate of output.
B. expects to gain.
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Insurance companies charge a lower premium to drivers who carry a higher deductible because
A) insurance companies are not profit maximizers. B) a driver's riskiness decreases as the driver's deductible increases. C) a high deductible signals a high risk. D) insurance companies prefer that drivers carry no deductible.
In a labor-market separating equilibrium with high-skill and low-skill workers and where a costly educational degree is used solely as a signal device, government can increase total social welfare by
A) subsidizing school for low-skill workers. B) subsidizing school for all workers. C) eliminating schooling, i.e., banning wasteful signaling. D) subsidizing school for high-skill workers.
In the production function Real GDP = T (L, K, NR, H), the T represents the _____________ coefficient, the L represents ________________, the K represents _______________, the NR represents natural resources, and the H represents ________________
A) tax; labor; capital; humanity B) technology; labor; knowledge; humanity C) technology; labor; capital; human capital D) trade; labor; knowledge; human capital
A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
A. cynical behavior in modern democracies. B. a concern that people are not rational when they make decisions. C. failing to consider the alternatives available to the government. D. using incentives to alter behavior.