Which is NOT an example of moral hazard
a. people eat more at all-you-can-eat buffets
b. loggers select the most profitable trees to harvest even when they are paying a fixed fee
c. Drivers of heavier, safer cares are more likely to run stop signs
d. workers on commission work harder than those paid an hourly wage
b
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The difference between the exchange value of a money and its cost of production is defined as
A) seigniorage. B) net value. C) net exchange profit. D) the face value.
Which of the following would increase prices for U.S. consumers?
a. a tariff on imported automobiles b. an automobile import quota c. a foreign government subsidizing auto production d. (a) and (b) above only
When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers
a. True b. False Indicate whether the statement is true or false
Suppose that a haircut will give Dawn 2,000 units of utility and cost her $40, whereas a manicure costs $25 and yields 1,000 units of utility. Most likely Dawn should:
A. choose the haircut because she will receive 50 units of utility per dollar compared with 45 units of utility per dollar for the nails. B. be indifferent between the two choices. C. choose the haircut because each unit of utility will cost her $0.02 compared with $0.025 for the nails. D. choose the nails because she will obtain 50 units of utility per dollar compared with 40 units of utility per dollar for the haircut.