Adverse selection in insurance requires that
a. potential customers face different levels risk
b. potential customers facing more risk are no more interested in purchasing insurance
c. people are not risk averse
d. insurers can tell higher risk people from lower risk people
a
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A sharp increase in the price of beef that causes consumers to switch to chicken is predicted to ________ the real wage and ________ employment of unskilled workers in a poultry processing plant.
A. increase; increase B. increase; not change C. increase; decrease D. decrease; decrease
Which of the following conditions, if present, is sufficient to make a game cooperative?
A) Individual payoffs are greater if all players choose the same strategy. B) Players can communicate with each other. C) Players can negotiate binding contracts committing them to particular strategies. D) Players must agree unanimously on any set of strategies. E) The payoff that is highest for all individuals together is also highest for each individual player.
When the price of bread increases by 3 percent, the quantity demanded of crackers increases by 2 percent. The cross elasticity of demand between crackers and bread is:
a. 0.67. b. 1.5. c. 2.5. d. 3.2. e. 5.0.
A household consists of only related family members like a father, mother, and children and not unrelated members like two students sharing a rented apartment
a. True b. False Indicate whether the statement is true or false